Looking at the earnings release I ran some numbers as follows: 2011 revenues should be around $90-91 million based on actual and projected. They had a 27.1% gross profit margin this quarter and I used that as a constant.
2012 revenues are projected at $177 - $187 million, basically a 100% increase over 2011. 2012 GAAP earnings are projected .82 - .96 per share. On 23.6 million shares outstanding that implies net earnings dollars of $19.3 - $22.7 million. Depreciation right now runs at roughly $8 million per year so add that back into earnings and this little company will generate close to $30 million in free cash flow by the end of next year if they hit the numbers. Plenty of money for expansion out of cash flow added to the cash they have now with NO DEBT.
Assuming 100% increase in sales again in 2013 we get sales of $354 - $374 million. Assume the same gross profit number of 27.1% and the same SG&A number of roughly $29 million. This is a fairly fixed number since they clearly stated they can expand the business quickly without adding extra overhead. Just for grins increase it by 10% to $32 million to cover incrementals.
For 2013 the potential is $360 million sales times 27.1% gross profit = $98 million gross profit less $32 million SG&A (about 9 million of that will be depreciation/amortization - non cash expense) gives GAAP earnings of $66 million divided by 23.6 million shares out or $2.79 per share. Just a market PE of 15 is $41.85 per share. You think all they will get is a market PE on that sort of eye-popping growth? Try a PE of 40 or 50 like SODA has enjoyed this year. How does $70 - 80 per share sound a couple years out on a $4.50 investment today?
PPS - you think this isn't why people were falling all over themselves to get in on the IPO and secondary offerings at $12? They certainly weren't buying 20 million shares hoping Q3 '11 would meet "expectations".
PS - do you think I am the only one running numbers here? You think maybe our MM friends who helped with the stock offerings aren't aware of this and just maybe manipulated this unbelievably dramatic selloff for "gasp" their own accounts and long term personal profits?