Brian,
I think you may have misread the earnings report. CTEC made a profit of $2000, which is $0.00 per share. Actually, their operations lost $86,000, and they made $90,000 interest on their cash, so their operations still have not quite broken even.
But the big news, in my opinion is the increase in R&D spending, from $175,000 4Q96 to $436,000 4Q97. Without that increase CTEC would have earned $0.02 this quarter.
It seems as though management went into a cost-cutting crisis mode for about a year and a half to stem the losses and conserve money. That helped to lower the quarterly losses, but it didn't provide for a strong future, because any tech company needs R&D to bring out new products. CTEC is spending 11% of sales on R&D now, which should pay dividends later on.
Two other points: domestic sales increased nicely once again, but someone needs to kick a little international distributor butt. Doesn't CTEC have an Italian distributor and a Brazilian deal going on? Where are the results? Second point, I hope someone at CTEC is keeping a close watch on Hewlett-Packard/iStat developments. |
