Eddie
You are missing something, you stated First of all, EFNT's net profit B4 all amortization type charges was $6.1 million and $.10 per share; however this includes $6.9 million of interest income, therefore they actually lost $.8 million and $.01 per share from operations. Conversely, WSTL's comparative number after adding back the interest expense amount of $331K, was a net profit of $814K and $.01 per share. WSTL's numbers are certainly disappointing but EFNT is not exactly setting the world on fire.
First you can't seperate things like that... if you are going to seperate the +$6.9 M on the INTEREST Income side you have to remove the -$5.7 M on the INTEREST Expense side. That is the only fair comparison.
Bottom line:
GRoss Profit: $41.5
Expenses:
SM: -$18.2
RD: -$13.0
GA: -$5.3
Total: $5.0 M from OPERATIONS
.085 PER SHARE FROM OPERATIONS
INTEREST INCOME & INTEREST EXPENSE are included in the .10 EPS
INCOME +6.9
EXPENSE -5.7
NET +1.2
That would be .02 due from interest, not .09 as you implied (you said they only did .01 from operations, instead of .10) Trust me the market is not THAT DUMB (although sometimes I doubt it) to reward EFNT 33% for doing "accounting trickery" You get punished by the investment community for pulling stunts like that.... as WSTL is a perfect example.
Further Gross Margins on CPE for EFNT are 32.5%
Gross Margins on CPE for WSTL are under 1% this Q.
So in relation to WSTL, EFNT is setting the world on fire. And yes you need sales to get new customers... and to get sales you need CASH. WSTL CASH = $8M, down from $13M in previous quarter.. where is the cash going to come from? Their sales dollars actually went DOWN from the previous quarter.
it is all good to reduce sales dollars as you mature but in this stage in a COMPETITIVE environment and to reach MZ's goals which he finally realized on todays CC of "We need more customers, duh" you need to spend. If you dont have the money you cant spend.
I think you made a honest mistake, but I dont want to see misrepresented facts.
Compare apples to apples.
Mark |
