•Recent NEWS: Sitestar Purchases Netrover, Inc. MONDAY, JANUARY 09, 2006 4:21 PM - PrimeZone Sitestar Corporation (SYTE) , a provider of residential and business Internet access and value-added computer services, today announced that it has purchased Canadian-based Netrover, Inc. Sitestar gains over 7,000 customers including dial-up and Digital Subscriber Line (DSL) Internet subscribers, web hosting and other business accounts.
Sitestar Corporation Expands DSL Coverage Thursday, December 15, 2005 1:15 PM - PrimeZone Sitestar Corporation (SYTE) , an Internet Service Provider (ISP) and computer services company, today announced the expansion of its DSL coverage area in the western part of the United States. Sitestar is now able to provide high-speed DSL service in nine states through Qwest's network, including Washington, Oregon, Montana, Wyoming, Idaho, Utah, Nevada, New Mexico and Colorado. In addition to providing DSL connectivity in these areas, Sitestar will also be able to create private networks (WANs) between offices that will not have to traverse the Internet.
Sitestar Corporation Posts Profits in Third Quarter 2005 Wednesday, November 16, 2005 11:31 AM – PrimeZone Sitestar Corporation (SYTE) , an Internet Service Provider (ISP) and computer services company, today announced that profits were posted for the quarter ended September 30, 2005. The company earned a net profit of $116,524 for the third quarter of 2005 and $344,333 for the nine months ended September 30, 2005. This marks the fifth consecutive profitable quarter for Sitestar.
*Highlights: **Profitable 5 straight quarters, first 3 quarters 05 and for the full yr 2004. **Income from operations increased $257,203 or over 118.0 percent and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased 57.0 percent from $536,742 for the nine months ended September 30, 2004 to $841,017 for the same period in 2005.
•Proving Strategy Works – Future Looks Bright: **Growth strategy is to acquire profitable Internet companies through acquisition. Company has emphasized that Economy of Scale will lead to growing profits. Economy of Scale = As company expands through acquisition, revenues are growing quicker than operating costs and thereby leading to increased profits and cash flow.
**Idacomm acquisition doubled SYTE’s revenue and more than quadrupled earnings. (Note that the following numbers do not include latest acquisition of Netrover, Inc. which should serve to boost earnings and price projections) *Explanation: Recent 10Q shows pro forma earnings at $.02 for first 9 months of 2005. Trailing earnings per share were around .005/share, but as a result of Idacomm acquisition earnings more than quadrupled to an estimated $.022/share on annual basis [1,423,667x(4/3)/86 mil)]. Company confirms acquisition was accretive to earnings on an immediate basis. 10Q indicates that $.02/share for 9 months may be low due to cost reductions and operating efficiencies (i.e., Economy of Scale) that are to occur.
**Goal is 100,000 customers by summer 2006. This is around 5 times the customers at time of Idacomm acquisition and would correspond to 5 times greater revenue – but – possibly 10 times greater earnings/share. Can think of this as linear (or upward sloping straight-line) revenue growth and corresponding exponential (or upward curved) earnings growth, or 1 + 1 = 4.
• Estimated Value: P/E fluctuates considerably due to volatility of price. Calculation shows stock is significantly undervalued: **P/E = .070 (current share price)/.022 (earnings/share) = 3.2 P/E is generally considered the most accepted means of estimating a companies value. The lower the P/E, the more undervalued the company is. Average P/E for similar profitable company's = 24 If SYTE traded at average P/E, share price would = 24 x .022 = .53
*With reasonable assumptions of future earnings, P/E of 15-20 consistently shows future share price, if goals achieved, multiples higher than even .53. Note that calculations are simplistic and several factors vary greatly. Market cap would be unrealistically high if share price directly followed P/E valuation.
•Reduced Shares: Sitestar Corporation Cancels 20% of Its Issued Shares, Wednesday, December 01, 2004, 3:27 PM - BusinessWire. Reduced more shares since this PR – and more may be coming. CEO states more shares possibly targeted for cancellation.
•Current Outstanding Shares (note that numbers may need adjusted by 2 mil per recent acquisition of Netrover, Inc.) 86,013,305 --- Restricted: 34,843,805 --- Float: 51,169,500. Numbers per contact with TA on 10/24/05. Note that Insiders recently converted $120,000 debt owed into 4 mil shares. 6,218,305 shares in treasury. Insider’s own approx. 31%. Current Insiders have not sold a single share.
•Rid itself of CD: Sitestar Pays off Ex-Convertible Debenture Holders, Monday, February 28, 2005, 11:21 AM - BusinessWire.
•Strong Balance Sheet: 3rd Q 05 10Q shows cash flow positive and positive shareholder equity of $574,151 – up $236,523 from last quarter and continuing steady improvement.
•Company Goals: To be achieved by end of Summer 06: 1. To increase customer base to over 100,000 2. To increase revenues and net profits substantially 3. To continue mergers and acquisitions 4. To pay down existing debt 5. To raise additional capital for larger acquisitions 6. To introduce new products for broadband customers 7. To become a nationally recognized Internet Service Provider 8. To greater expand markets and coverage area 9. To provide better customer support and customer satisfaction 10. To increase stockholder equity 11. To increase the awareness of company and stock
•Notables: *Churn is a potential issue. This is the loss of customers, believed mostly due to switching to other ISP. *Full accounting of shares needed. Less than 1 million shares that were due the company in deal were delayed in delivery from other party. CEO has indicated that he is addressing the situation, but has yet to announce final closure. *VOIP, Wireless (WiMAX), and Broadband over power lines are all possibly in the future. CEO has indicated that plans are to provide VOIP, and other broadband offerings are being explored. *Method of financing for future acquisitions may be an issue. *Estimated Annual Revenue = $6,535,665 ---- Customer Base = > 27,000
•CEO = Frank Erhartic, Jr. has founded own company and has degrees in both Management and Finance.
•The Big No’s: No convertible debentures, No S-8’s, No preferred stock issued. No need for financing to support existing operations through share dilution or otherwise - cash flow sufficient to support operations. No outstanding litigation/lawsuits. No R/S per CEO. No deals with Laurus or Cornell. No outrageously high salaries for CEO and counterparts.
•Sitestar Corporation is an international Internet Service Provider (ISP) and computer services company offering a broad range of services to business and residential customers. Sitestar's wholly owned subsidiaries provide narrow and broadband Internet access, Web-hosting and design services, computer sales and repair and other technology-related solutions to its residential and business customers
Posts: 74 | From: Midwest | Registered: Dec 2003
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