Things are moving in the right direction.....,,,,,sales are once again growing and Ebitda has turned positive in a substantial way.
PN is in the third phase of a major business renewal program and is now ready for an exceptional griowth phase in the years ahead.
The first phase...............technological innovation.....has been completed.
It involved the creation and launch of PNI Photo Services API creating an endless ailse of choices for retailers.
It has created and launched cloud media integrations and partnered with Facebook, Google, Dropbox, Flicker, Instamgram and MS Skydrive.
It has created and launched PNI Mobile Photo SDI such that any retailer can now have a mobile photo Center.
And, it acquired Quarterhouse Software which completes PN's portfolio for web to print business printing.
The Second Phase involves new Clients and new Agreements.This is well underway, with Walgreens, Home Depot and now the mighty Samsung recently signed up.
So, what does all of this mean for future growth ?
Basically, PN changes about 7 cents for every $1 of its retailer's sales of its products.
In the last quarter for example, PN had sales of $4.5 million for $50.5 million of its partners sales of its products.
Gross margins are huge, at 63 %.
In order to calculate future growth in the absence of detailed parthers revenues, I have taken another approach using sales per retail location.
Prior to the recent major deals, PN's products were sold at 19,000 locations or roughly $1100 per retail location.
To this can be added 1100 locations for HD and 8000 locations for Walgreens, boosting the number of retailer locations to just over 29,000.
To this can be added 30,000 Samsung locations.
In other words, PN's suite of productions will now be sold at close to 60,000 locations or more than 3 times the number in Q3.
At $1100 per location, sales of PN products should rise to about $60 million or more per year.
This compares to core sales of about $20 million..a 300 % growth profile.
The impact on fair value will be huge.
PN traded at about $1.75 three years ago on peak sales of $27 million.
Using simple prorata, the fair value of the current business will be above $3 per fd share
Investing is all about future performance.
PN is now ready to rumble..