This evening ABIX announced its second quarter results under the grim
headline "Second Quarter 1997 Net Earnings Decline 12%". But actually,
I don't think that the results were quite that bad...
To summarize the release itself, the Company announced net earnings
of $238,000 or $.12 per share on revenues of $9,395,000 for the second
quarter of 1997 versus net earnings and revenues for the second quarter
of 1996 of $272,000 or $.13 per share and $9,028,000, respectively. The
entire release can be found at
biz.yahoo.com
So why do I think that this isn't "quite that bad"? Over the past
several quarters ABIX has been struggling with a variety of problems,
including weakening gross margins, and increasing selling costs resulting
from its newly-opened Las Vegas facility. This earnings report is
encouraging in that gross margins now appear to have stabilized, and
selling costs remained at prior levels. Pre-tax profits were virtually
identical with those from the prior year.
With a certain degree of concern about the wisdom of this move, over
the past several weeks I have been buying ABIX at prices between $2.12
and $2.25. This earnings release alleviates these concerns. The Company
appears to be moving into its strongest sales season with a respectable
amount of momentum.
The Company stated that "To improve shareholder value, the Board of
Directors is seeking an investment banker to review all options available
to the Company. Therefore, there are no current plans to purchase Company
stock beyond the 476,250 shares already purchased." This may indicate
that one of several moves is under consideration. |
