TNXI - The Guru's Buy and Hold Reports Net Income of $.11 for the Quarter

Yesterday TNXI reported another impressive quarter earning $.11 a share.  The stock closed today at $.07 a share.  If you put a conservative 10x multiple on this past quarters earnings TNXI would be trading at $1.10 a share.

With some recent company moves to address their debt overhang, this stock should be on more solid footing going forward.  The company's results continue to improve and I think the stock price will follow suit.


  Telanetix Reports Second Quarter 2010 Financial Results
Q2 Core Voice Revenue up 21 Percent Year-over-Year; Third Consecutive Quarter of Positive EBITDA
BELLEVUE, Wash., Aug 11, 2010 (BUSINESS WIRE) -- Telanetix, Inc. (OTCBB: TNXI), a leading communications solutions provider offering next generation voice services to the business market, today reported financial results for its fiscal 2010 second quarter ended June 30, 2010. Financial Highlights for the Second Quarter
-- Revenue was $7.3 million, compared to $6.9 in the second quarter of 2009, and $7.7 million in Q1 2010
-- Core voice revenue increased to $5.9 million compared to $4.9 million in the second quarter of 2009, and $5.8 million in Q1 2010
-- Adjusted EBITDA improved to $321,000, compared to a loss of $129,000 a year ago
-- Gross profit was $4.3 million, or 58.6% of revenue, compared to $4.2 million, or 60.7% of revenue a year ago, and $4.5 million, or 58.5% of revenue, in Q1 2010
-- Total operating expenses improved to $5.1 million compared to $5.2 million a year ago
-- Operating loss reduced to $818,000 for the second quarter compared to a loss of $962,000 a year ago
-- Net income from continuing operations for the second quarter was $3.4 million, or $0.11 per share, compared to a loss of $6.4 million, or a loss of $0.20 per share, in the second quarter last year
Adjusted EBITDA is a non-GAAP financial measure. Management believes certain non-GAAP measures provide relevant and meaningful measures by which investors can evaluate the business. EBITDA is defined as earnings or loss before interest, income taxes, depreciation and amortization, and the company defines Adjusted EBITDA as EBITDA adjusted for non-cash items including stock-based and warrant compensation, charges related to changes in fair market value of warrant and beneficial conversion feature liabilities. Reconciliation can be found at the end of this release.
Doug Johnson, Telanetix's CEO, commented, "Our top line growth in the second quarter was impacted by the expected attrition of two accounts, which comprise the majority of our legacy business. We expect the attrition of these accounts will be completed by the end of calendar 2010. We achieved second quarter growth in our core revenue, which includes our next generation Digital Phone Service (DPS), Individual Services and our SIP Trunking service, of 21% year-over-year and a slight increase sequentially, helping to offset the expected decline in legacy product revenues.
"We also achieved some significant milestones during the first half of fiscal 2010. Last month we announced a significant new distribution relationship with Mitel Networks, Inc., which adds a new revenue stream for the Company and expands our overall reach in the marketplace to potential customers ranging from larger medium-size businesses to Fortune 1000 Enterprises.
"We also recently completed a successful comprehensive financial recapitalization of the Company that substantially reduced our overall $29.6 million debt to a more manageable $7.5 million level, after giving effect to the closing of the rights offering discussed below, while simultaneously increasing our working capital by $2 million. We believe Telanetix is now in a much stronger position to capitalize on growth opportunities ahead and expand our presence and share in the market."
Telanetix also plans to conduct a $3.0 million pro-rata rights offering that will allow stockholders of record as of the record date of the rights offering to purchase shares of common stock at an expected subscription price of approximately $0.03852 per share. The record date is expected to be the effective date of the registration statement to be filed to register the shares of common stock issuable upon exercise of the subscription rights. The exact number of subscription rights to be distributed per share of common stock will be set forth in such registration statement. Telanetix's board of directors required the rights offering as a condition to the recapitalization to provide stockholders with the opportunity to purchase common stock at the same implied price per share paid by the Hale Capital Partners in the recapitalization.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Net income from continuing operations for the second quarter of 2010 was $3.4 million, or $0.11 per share, compared to a loss of $6.4 million, or a loss of $0.20 per share, in the second quarter last year. Net income for the second quarter of 2010 includes a $5.0 million credit for the change in fair market value of derivative liabilities and $788,000 of interest expense. The net loss for the second quarter of 2009 includes a $4.4 million charge related to the change in fair market value of derivative liabilities and $1.1 million of interest expense.
Total cash and cash equivalents were $965,000 at June 30, 2010, an increase from $824,000 at March 31, 2010.
Conference Call Information
Management will conduct a conference call at 1:30 p.m. PT (4:30 p.m. ET) today. To access the call in the United States, dial (866) 543-6411 and to access the call internationally, dial (617) 213-8900 and enter pass code 89547543. The call will also be broadcast live over the Internet and will be available for replay for 90 days at www.telanetix.com. A telephone replay will be available two hours after the call through August 18, 2010 by dialing (888) 286-8010 in the United States and (617) 801-6888 for international callers. All parties will need the following replay pass code 74878807.
About Telanetix, Inc.

The Guru's Stocks To Watch This Week- SPAL, RNWF, SSWC, APCVZ, TNXI, ETLS, TCLIF

The Guru has a list of stocks that need watching this week, as they are one's I feel will post big gains as well as one's that will offer the opportunity for profitable trades.

SPAL name change indicates a merger is imminent, the stock has a very low share count. The stock has pulled back from its $.07+ high, and at current prices offers a great opportunity to get in befor the news. SPAL should be valued at $.01 - $.02 just as a shell, a merger would add significant value.

RNWF this stock looks ready to test its recent highs. Recent SEC filings have lit a fire under RNWF, and I expect interest to swell this week. Look for a test and break of recent highs.

SSWC has been slowly trading higher as investors realize the potential with this stock. I could see a push to $.001 coming soon with the corsshairs set on the 52 week high.

APCVZ this stock should be a mover on Monday. The company had one of its drugs apporved by the FDA and another one tentatively apporved this past Friday.

TNXI I think the selling was overdone on Friday and this stock should see a steady rise this week.

ETLS has been a very interesting stock to watch the last few months. While the stock readies itself for another run, buying in the $.002's and selling in the $.003's and $.004's has been a profitable strategy.

TCLIF continues to see buying at $.0002. With a little more buying pressure on Monday I think the $.0003's and $.0004's will come swiftly. That represents a 100% gain. I could also see it heading much higher than that as shares get scarce. It is worthy of a few lotto tickets.

TNXI - Headline Number Dissappoints, Details Impress

When I wrote about TNXI last night and their impending earnings release I noted the chance for a headline number disappointment:


My point is if the EPS doesn't come in at $.04 like last quarter and instead comes in at $.01 or even a loss, I wouldn't think that makes this stock any less of a buy then it was last quarter. The time to be buying these stocks is while they are growing. By the time they are posting big profits the stock has already been bought up by the investor community.

Sure enough tonight TNXI posted a $.17 loss for the quarter.  That loss included a $4.2 million charge for the change in fair market value of warrant and beneficial conversion feature liabilities and $0.8 million of interest expense.  On the surface it doesn't look good, and some investors might shy away.  But dig a little deeper and you've got a company that continues to grow and one that, at some point in the future will be trading over $1 a share.

Straight from tonight's press release:

Financial Highlights for the First Quarter
-- Revenue was $7.7 million, up 6.4% from $7.2 million in the preceding quarter and up 9.1% from $7.0 million for the first quarter of 2009.
-- Core voice revenue increased 8% to $5.8 million, compared to $5.4 million last quarter.
-- Adjusted EBITDA improved to $517,000, compared to a loss of $318,000 a year ago.
-- Gross profit was $4.5 million, or 58.5% of revenue, compared to $3.9 million, or 55.5% of revenue a year ago.
-- Total operating expenses improved to $5.0 million, compared to $5.1 million a year ago.
-- Operating loss was reduced to $0.5 million for the first quarter as compared to a loss of $1.2 million a year ago.


I think those are some impressive highlights.  Positive EBITDA, revenue continues to grow, expenses have been reduced, the list goes on.  I haven't seen the actual 10Q I do believe it will be out in the morning.  At that time I will glean more details from this quarter.

TNXI remains a Guru Buy and Hold.  If anything the recent quarter validates my position on this stock.  This is a growth stock, one that is on the cusp of posting consistent profitable quarters.  By the time that happens TNXI will be over $1 a share.



Telanetix Reports First Quarter 2010 Results
BELLEVUE, Wash., May 13, 2010 (BUSINESS WIRE) -- Telanetix, Inc. (OTCBB: TNXI), a leading communications solutions provider offering next generation voice services to the business market, today reported financial results for its fiscal 2010 first quarter ended March 31, 2010. Financial Highlights for the First Quarter
-- Revenue was $7.7 million, up 6.4% from $7.2 million in the preceding quarter and up 9.1% from $7.0 million for the first quarter of 2009.
-- Core voice revenue increased 8% to $5.8 million, compared to $5.4 million last quarter.
-- Adjusted EBITDA improved to $517,000, compared to a loss of $318,000 a year ago.
-- Gross profit was $4.5 million, or 58.5% of revenue, compared to $3.9 million, or 55.5% of revenue a year ago.
-- Total operating expenses improved to $5.0 million, compared to $5.1 million a year ago.
-- Operating loss was reduced to $0.5 million for the first quarter as compared to a loss of $1.2 million a year ago.
Adjusted EBITDA is a non-GAAP financial measure. Management believes certain non-GAAP measures provide relevant and meaningful measures by which investors can evaluate the business. EBITDA is defined as earnings or loss before interest, income taxes, depreciation and amortization, and the company defines Adjusted EBITDA as EBITDA adjusted for non-cash items including stock-based and warrant compensation, charges related to changes in fair market value of warrant and beneficial conversion feature liabilities. A reconciliation can be found at the end of this release.
"During the quarter we continued to make significant progress, achieving improvement in all of our core key financial metrics including continued sequential revenue growth on reduced operating expenses," said Doug Johnson, Telanetix's CEO. "Our next generation Digital Phone Service (DPS) continues to be a growth driver, posting a strong sequential increase in its installed customer base during the quarter. We look to build on this strong core revenue momentum through the remainder of the year as it helps to offset the expected churn in our legacy revenue due to the departure of two significant legacy customers."
Telanetix reported revenues of $7.7 million for the first quarter of 2010, up 6.4% from $7.2 million in the preceding quarter and up 9.1% from $7.0 million for the first quarter of 2009.
Net loss from continuing operations for the first quarter of 2010 was $5.5 million, or a loss of $0.17 per share, compared to a loss of $1.8 million, or a loss of $0.05 per share, in the first quarter last year. The net loss for the first quarter of 2010 included a $4.2 million charge for the change in fair market value of warrant and beneficial conversion feature liabilities and $0.8 million of interest expense. The net loss for the first quarter of 2009 included $0.9 million of income related to the change in fair market value of warrant and beneficial conversion feature liabilities and $1.4 million of interest expense.
Total cash and cash equivalents were $824,000 on March 31, 2010.
About Telanetix, Inc.
Telanetix is a leading communications solutions provider offering next generation voice services to the business market. Telanetix solutions meet the real-world communications demands of its customers with powerful, cost effective industry-leading communication solutions. The company's voice offerings, marketed under the "AccessLine" brand, give business customers a flexible, easy to use, cost effective alternative to today's traditional phone service, offering flexible calling solutions, a simpler installation experience, and a greater range of support options than traditional telecom providers. Additional information may be found at the Telanetix corporate website, www.telanetix.com.
Safe Harbor Statement
Certain statements contained in this press release are "forward-looking statements" within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by the company with the Securities and Exchange Commission could materially and adversely affect our business, operating results and financial condition. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The companies undertake no obligation to publicly release statements made to reflect events or circumstances after the date hereof.

TNXI - Earnings To Be Released Tomorrow.

One of the Guru's buy and hold's releases its earnings tomorrow. Last earnings release TNXI went from $.05 to $.15 a share. I am hoping for another blow out quarter, which we may get. Just bear in mind last quarter's numbers were helped by some accounting perks, which bumped the EPS higher than it should have been. The over all growth and positive trends of the company aren't represented by merely one number.

My point is if the EPS doesn't come in at $.04 like last quarter and instead comes in at $.01 or even a loss, I wouldn't think that makes this stock any less of a buy then it was last quarter. The time to be buying these stocks is while they are growing. By the time they are posting big profits the stock has already been bought up by the investor community. That is what makes penny stock investing so fun. You are a speculator, one that is looking for the next big stock. TNXI looks to be one of those stocks and the earnings release tomorrow should provide more evidence of that.

Monday's Stocks To Watch - ETLS, SPMI, CIND, TNXI

ETLS hit $.005 on Friday before pulling back. This was a healthy move, and should bode well as ETLS continues its trek back to $.01.

SPMI this Guru undervalued stock has hit a recent low and looks poised to post at least a 50% gain from current levels. Do some research on this stock and you will see the value these shares hold.

CIND with the very small share structure this stock remains one to watch this year. Any news will send CIND well over $.10 a share.

TNXI this Guru Buy and Hold looks poised to breakout in the weeks before it reports earnings. I think $.10 is a number we could see at some point this week.

Stocks To Watch Monday April 25th - CIND, BUNM, TNXI, SSWC

CIND this stock, and it's microscopic outstanding share count, should see some modest volume on Monday.  I suspect decent buying volume would give the stock a nice lift.  Also the shell, which has been dormant for 16 years, could be getting ready to announce news in the future.

BUNM has consolidated for its initial burst higher.  This week should start the move to $.0006, that I had mentioned previously. 

TNXI my buy and hold has once again reached a price that is just too hard to pass up.  Last quarter the company earned $.04 a share.  The stock closed trading on Friday at $.073 a share.  Factor out the $.04 over a full year and you get a company that is potentially trading at a 1/2 PE.  That is unheard of.

SSWC continues to trade in a tight range.  The stock came under some pressure early in the session on Friday only to finish strong and reinvigorate hopes of what could be a big move in the days and weeks ahead.

Wednesday Watch List - TNXI, EMXC, KATX, SPMI, CDIV

TNXI, a Guru's Buy and Hold, surged over 30% higher today, before settling up 22%. This is the start of the run that will bring this stock to the targets the Guru set last month when I made it a Buy and Hold: http://pennystockgurus.blogspot.com/2010/03/tnxi-added-to-gurus-buy-and-hold-list.html Short term $.25 Long Term $1.00+

EMXC rebounded smartly from an early session decline as buyer swooped in to take advantage of the under valued shares. The stock briefly posted 10%+ gains before pulling back slightly at the close. The stock has solid support at $.006 and some tough resistance at $.007. There have been two tries to break the $.007 barrier, each of which have been unsuccessful. The third time should be the charm. A break of $.007 would make the short term target that much closer.

KATX I expect this stock to open much higher tomorrow. You should have been listening to the Guru the last few months. I have a feeling those who did will be very, very happy.

SPMI released their annual report after the close, posting a $.01 profit. Currently trading at $.085 a share the stock is undervalued compared with its revenues, net income, assets, and cash on hand. They also anticipate opening new stores in the coming months. This growing, profitable, sub $.10 stock should be trading at much higher levels.

CDIV I end with my chart of the day. The last time I had CDIV on the blog it was trading at $.28 a share and I noted how an investment of $1,000 at $.01 would have been worth $28,000. It turns out an investment of $1,000 at $.01 would be worth $57,000 today. Not bad for a few months of watching a stock trade.

Tuesday Stocks To Watch - TNXI, EMXC, ETLS, SARO

TNXI has traded down long enough.  It is mounting a rally and I think $.15 is the next short term stop.

EMXC this stock is curling up for a big price breakout.  $.01 could be seen as soon as tomorrow.

ETLS is back to its old ways.  Slow steady accumulation.  With the low share count and high insider ownership there is no reason why this stock shouldn't be trading over $.002 a share.

SARO was up again today.  I think it could see $.0012 or better before the run is over.

TNXI - The Guru's Buy and Hold Is Ripe For A Rally

TNXI, a Guru Buy and Hold stock, has recently sold off after the initial earnings euphoria.  This was to be expected.  Penny stock traders have very short memories and move on to the next active stock.  The same thing happened to POWN early this year after the Disney stake was revealed.  The stock mounted a 2-3 day surge and then sold off.  After the sell-off POWN underwent an impressive rally bringing the stock from less then $.10 a share to over $.70 a share.  I think the same type of price action is coming TNXI's way.

Why?

TNXI had over $28 million in revenues in 2009 with a net income of $.04 a share.  Considering this stock was recently trading for $.08 a share, to say this stock is undervalued would be quite modest.  I do understand the company has some significant debt obligations, but if you take away interest payments the picture gets even rosier.

My point is this: the company has finally turned the corner.  When TNXI has finally broken free and paid off its debt the stock will be trading at $2 - $3 a share.  Do the math now on the EPS.  Using a conservative multiple of 10 for just the 4th quarter result of $.04 a share, TNXI would be a $.40 stock.  Factor in another 3 quarters of equal or greater net income numbers and you are looking at a $1.60 stock.  Use a multiple of 15, still very conservative and you get price per share of $.60 just on the 4th quarter number, $2.40 if you carry that number through out the year.

The bottom line: this stock is trading well below what it's true value is.  By the time TNXI has truly turned the corner this stock will have soared well beyond today's close.  Remember this was a $7 a share stock only a few years ago.

TNXI remains a Guru Buy and Hold.  Keep it on your watchlist.

Stocks To Research This Weekend - TSLI, WTCG, TNXI,VIPR, ETLS

I will be quick with these and I would enjoy some feed back on these names:

TSLI acquisition coming will be huge for shareholders.

WTCG the stock tested recent highs and should trade above them next week.

TNXI my new buy and hold, I think anything around this $.10 level will be golden down the road.

VIPR another Guru I told you so.  $.0035.

ETLS  I started the week off with ETLS at $.0007 and it did not disappoint.  I think next week will be even more impressive.

Thursdays Stocks To Watch - PGPM, TNXI, ETLS, AZTC

PGPM is a stock the Guru thinks could hit $.001 in the next few days. A break of $.001 would give $.0015 some credence. Let's see increased volume and another +15% day before we start jumping on the bandwagon, although I have a good feeling about this one. I think before all is said and done this stock will trade at $.002 or more. I've been wrong before, just not very often.

TNXI the Guru's brand new Buy and Hold failed to disappoint today. Call me crazy with this stock, but I could see $1 coming in a rather quick and violent fashion. Of course it could pull back like POWN did after if burst up from $.06. It would give everyone an amazing buying opportunity. My point is do not jump the gun. Let the price come to you.

ETLS popped early in the morning before settling down. The continued orderly ascension of this stock is very impressive. Each notch higher makes this stock an even more impressive play going forward.

AZTC this stock has posted a chart we all like to invest in. Imagine grabbing shares in AZTC only a few weeks ago. You'd have made 1,000% on your purchase. Let's see what tomorrow brings.

TNXI - A Guru Buy and Hold - Explanation Part I

I added TNXI to my Buy and Hold list on an impressive earnings report on Monday. I put a short term $.25 target on the stock with a longer term $1 price. That was when this stock was at $.083. Remember a few months ago I did the same thing with POWN. POWN was at $.06 a share and I gave a short term target of $.25 and a long term target of $1.25. POWN hit $.70 today a full 1,000%+ from my Guru Buy and Hold call.

I think TNXI could pull a POWN and then some.
Here is one thing to get you excited if you are a TNXI shareholder. This was a $7 stock only a few years back. With this company mounting an impressive turnaround, I expect investor interest to return with a renewed vigor.

TNXI - Added To The Guru's Buy and Hold List

After yesterday's blowout earnings report, TNXI is deserved of the Guru Buy and Hold label.

I will have more about this one in the days and weeks ahead.

My first short term target is $.25, with a long term target of $1.00.

TNXI closed trading Tuesday at $.081 a share.