Raimondas,
Thanks for calling my attention to this issue. Yes, RGFX consumed $663,000 in net cash used in operating activities during FY96. Considering the funds RGFX has had to spend in its product transition to the P5000, which from all accounts appears poised to be the most successful product in its history, I think it is quite encouraging they have gotten to this point. Only 2 years ago in FY94 they burned $2,223,000 during the year.
RGFX has just introduced the P5000 in March '97. P1000 was introduced in December '96. It is too early to make judgments. The stock has a great base at the current price level and we will all be watching to see if and when these products can improve the cash flow situation.
I will try to sharpen my accounting skills and figure out how they have been able to report good earnings recently without corresponding favorable cash flow. Perhaps others can help in decomposing the financial reports. With mergers, important new products and an IPO last year, it is never easy. Although this company has been around since 1987, I really think the company has been reborn in the last year or two due to these changes.
Being cash flow negative from operations is not good for a mature company, but for one that is in the early stages of a growth cycle is not unusual. I seem to remember being cash flow negative myself during my formative years. <G>
Regards,
SC |
