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Jeff Hawkes  

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  • Black Box: What's Wrong With 18.7% or Better? [View article]
    BBOX core business of selling PBX hardware is in decline. Unit sales of hardware have steadily decreased over the past decade and this will continue to be amplified by the current trend of moving on-premise equipment "to the cloud" (Hosted VoIP, etc.)

    BBOX catalog business is commoditized. (as you can see by breaking out the revenue and looking at GM)

    BBOX grows by aquisition and will need to continue to make more (using it's stock as currency) to propel both top and bottom line growth in the future as they have done in the past. If BBOX was a retailer, it's comp sales number would be negative nearly every year.

    Finally, looking at the 10ks, I don't see any goodwill write down in the recent history. Are all the past acquisitions performing at the implied valuation at the time of purchase? Based on the organic growth rate, I'd say no. If/when they take goodwill impairments, this will obviously affect earnings (and PE ratios, etc.)

    I have no position in BBOX. My comments are solely meant as food for thought.

    Aug 1, 2011. 02:14 PM | Likes Like |Link to Comment
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