July 11, 2003
MAMMATECH CORP (MAMH.OB)
Quarterly Report (SEC form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATION FOR MAMMATECH CORPORATION
Results for the third quarter of Fiscal 2003 were disappointing but not surprising in view of the international situation. Sales decreased 36% relative to the previous quarter and by 34% relative to the third quarter of 2002. The operating loss of $41,027 compares unfavorably to the loss of $6,747 in the previous quarter and to the gain of $1,851 during the third quarter one year earlier. The negative operating income is partly the result of an abrupt decline in orders from the Company's regular military and other federal customers as the war in Iraq began. The net loss of $9,397 reflects the value of the Company's ongoing SBIR grant and the contribution of the Company's investments to net income.
The nine month figures are more encouraging. Net sales increased by 24% compared to last year. This is coupled with a slight increase in cost of goods and a slight increase in operating costs. As a result, the positive performance for the nine month period reflects a turnaround compared to the results a year earlier. There can be no assurance that this trend will continue although sales remain stable.
The MammaCare operation in Germany is expanding with a new training Center being developed in Munich. Sales volume is steadily increasing and has occasioned expansion of the Company's manufacturing facilities. There can be no assurance that sales volumes will be sufficient to offset the increased costs incurred by this expansion.
A number of medical education institutions are seeking to adopt the Company's MammaCare(R) Professional Training Programs and preliminary discussions have begun with several. In the first quarter of fiscal 2003, the Company announced an agreement with the University of Florida College of Nursing In order to maintain the recognized standards of MammaCare training in distant settings, a broader license agreement has been prepared. As the current quarter came to a close, the Company initiated negotiations with a major institution of medical education on the west coast and training of the prospective director has begun. There can be no assurance, however, that the Company will successfully complete this negotiation or, if successful, that substantial revenue will result.
The SBIR funded research designed to extend the MammaCare method of manual breast examination to benefit women with major physical disabilities is progressing well. Finally, Company officers received notification during the quarter of receipt of two patents covering an instructional system for teaching fine needle aspiration. The officers have granted the Company certain rights, at no cost, to use these patents. |
