Robert, the results are better than I had expected. After I had reviewed the results, I put in a buy order at $1.04, a bit of a low-ball but I already have a significant position. I didn't get filled, so I'll wait. The history of XLX suggests that I might get another chance at this price in spite of the good news.
In my opinion, the news is positive from a number of perspectives.
1. If we are at the break-even point, our burn rate is zero and we are sitting on $7.9M of working capital ($4M in cash). Pretty healthy situation!
2. Sales seem to be growing rapidly. Q4 had $2.9M compared to $5.6M for the full year. That translates into 52% of the annual sales were made in Q4.
3. Annual sales grew from $3.6M to $5.6M or 56%. That indicates that the much touted doubling of sales by Olympus was far from realized. Just a shortfall of 46%. The performance, or non-performance, of Olympus does concern me.
4.The AGM is on June 2, 1999. It is usual for XLX to hold their AGMs late. I suspect this is usually the case because they want some good news in the most recent Q1 to deflect attention from the poor performance of the previous year. However, if the revenue growth continues and profitability is reported in Q1, it will deflect attention from the fact that Olympus fell far short of its promise. If this is so, I won't be too critical at the AGM.
Small-caps are not necessarily doing all that well right now, so we may not see too much positive response in the market. Of course, I may get my buy order filled.
Guardedly optimistic on Xillix.
Regards, Ed |
