FCM filed its 10Q.
revenues fell,
gross margin fell badly, due to lower revenues and revenues shifting to the lower-margin telephone business.
inventories grew, and are now about 6 quarters of sales, which is way too high.
shareholders equity fell to $4.8 M. AMEX requires a minimum of $4 M for listing.
dilution was large, with shares outstanding increasing from 28,161,904 to 25,796,726, sequentially.
cash burn in operations was $2.2 M, with only $1.1 M cash remaining
The cash situation looks, to me, like a liquidity problem, although management disagrees, saying
" The Company believes that existing cash and cash equivalents, cash flow from operations and cash raised through private placements will be sufficient to meet
the Company's presently anticipated working capital needs for at least the next 13 months."
Here's the discussion of the large customer who couldn't pay. I wonder what the event after Sept. 30 might be:
Operating Expenses. Operating expenses increased by $1,503,000, or 93%, from
$1,610,000 in the three months ended September 30, 1998 to $3,113,000 in the
three months ended September 30, 1999. The primary reason for the increase was
due to a one time increase in the allowance for doubtful accounts of $1,284,000
for the receivable of a major customer. The major customer's current financial
condition and certain events relating to the customer, occurring subsequent to
the Company's fiscal quarter ended September 30, 1999, were considered in the
decision to make the reserve. |
