naturalperson
Sorry my negativity made the stock drop today after such a positive report. I will try to quit calling Mike an idiot in your presence. There are some encouraging statements in the MD&A letter but no specific explanation for the explosion of expense
Here is the Management Discussion and Analysis on the June 2005 quarter. Do you see any specific attempt to explain the huge increase in fixed operating expenses? I don't, what I see is an attempt to sweep this increase under the rug by comparing the % of sales that these expenses represent this is called obfuscation i.e. deception. Fixed cost do not increase automatically as a percent of sales that is why they are fixed cost. You would expect variable costs to increase as sales increase these cost are not typically variable should not significantly increase until a production wall is hit and new capacity has to be added.
"Total operating expenses (excluding cost of sales, amortization and stock based compensation) of $517,814 for the quarter ended June 30, 2005 have increased compared to
$234,141 for the quarter ended June 30, 2004. On a percentage basis, operating expenses increased from 40% of sales in the quarter ended March 31, 2004 to 55% of sales in the
quarter ended March 31, 2005."
This is mainly due to the increased marketing effort in North America and Europe and a concentrated effort in the US Armed Forces with training sessions across the country. Pyng Medical Corp’s product, the F.A.S.T.1™ System, was recommended by the Committee on Tactical Combat Casualty Care as the product of choice. Pyng Medical Corp. has made
extended efforts to bring correct training procedures to the approximately 50,000 medics in the U.S. Military. This is one of the principal roles of the company Director of Business
Development. The company’s effort in this regard is resulting in increased sales to the U.S. military and other countries."
Here is the link to this document:
sedar.com
Again I will try to be more positive and not purposely undermine the stock but I will continue to tell it like I see it.
Regards
Jack |
