2Q earnings guesstimate. Part 2
SG&A - SGA tends to be the 'solid granite' of any company's
expenses though as I've said in earlier posts, GRIN has had
some success in reducing SGA over the past few years, as
a percentage of net sales. For example, the annual SGA figures
for years 1995 to 1998 have been 36%, 33%, 29% and 26.8%.
Over the past few quarters, SGA has been roughly in the range
$1.7M - $2.3M, usually higher when net sales are high (more
transport, utility, overtime costs etc). As I'm estimating sales
at $11.6M , my SGA guess is $2.5M.
INTEREST - GRIN has a line-of-credit for inventory purchases
which at times can spike-up to the $10M range, especially for
Christmas inventory. For this reason, interest costs are around
$0.5M per year. and are quite volatile quarter to quarter, from a
low of $19k (2Q98) to $128k (1Q99). Therefore to keep the estimates
conservative and given the high 2Q sales estimate, I'll use $150k
for 2Q interest costs.
In the third and final part of this series, I'll consider bad debt
expense, foreign exchange adjustment and net earnings before
and after taxes. |
