cat got your tongue?
yeah, i'm responding to no one in particular.
i crunched a few numbers yesterday -- before today's pop and wicked volume.
regarding the balance sheet, from Q2 to Q3, we had sales, receivables, and inventories up 5%, 61%, and 11%, respectively. with wilmoth as M.C., that was the primary killer. now Q3 to Q4, we have sales, receivables, and inventories changing by +3%, -6%, and +2%. by these numbers, not much has changed, but frankly, i'm not that surprised. how many of us were really expecting a one-quarter turnaround?
at least morash (CFO) got it right three months ago: "i do not expect that receivables will be higher than the Q3 level at the end of the year."
on a year-to-year basis, for 12 months ending sep 30, we had receivables and inventories up 90% and 57%, respectively. now ending dec 31, those numbers are up 70% and 67%, respectively.
so, A/R is coming down, but inventories aren't.
some explanations: according to a yahoo listener, management stated in the CC that they'll be looking to keep inventory levels at 100 days (about where they are now). with new products in the pipe -- a vinyl glove will debut for non-health apps in the second half of FY99 -- that means that inventory will increase slightly each quarter as the total dollar volume of business rises. so, as SFSK expands into new glove markets, they will have to increase inventories in each category of glove.
regarding receivables, management states that part of the reason they have risen is that their customers are taking longer to pay up; this is apparently an industry (i.e., HMO) phenomenom and not unique to SFSK.
still very long,
-chris. |
