Overall excellent report. $.14 vs. Flomenhaft estimate of $.10 and my estimate of $.12.
Better yet on an "apples to apples" fully taxed equivalent basis, which is the way the Street looks at these things. In other words if we look at this year and last year as though the tax rate was 40% in both years (my estimate of the ultimate full tax rate for Misonix), they did $.12 for Q2'98 vs $.07 for Q2'97. That's a 71% increase, slightly exceeding revenue growth.
Revenue blew away estimates. Continued healthy core business growth, less fall-off in Lysonix revenues than I had projected, and a faster ramp up of USS sales than expected.
Gross margins were a bit disappointing to me. I knew they would be down as the USS product has lower margins, but they were off more than I expected (this is due in part to the fact that USS revenues were a bigger piece of the pie than I expected).
SG&A was up significantly. I'll try to find out why.
R&D was down significantly. Seems to fluctuate wildly based on licensing deal income.
To put UAL business history in perspective, despite Lysonix "inventory" problem, UAL revenues were up over 70% from last year's Q2. Most companies would be crowing about that, not apologizing.
This stock should go to at least $10 once the Mentor injunction is history. I give us a 90% chance of winning that battle. That's an "expected value" of $9, or a 50% gain from yesterday's prices. Not a bad wager.
Fundamentally speaking, on a fully taxed basis, the trailing twelve month actual earnings are $.60. That gives us a ttm P/E of 10X. On the same basis, earning YTD are up 77% over last year. That's a (loosly interpreted) PEG of .13. Generally anything with a PEG less than .5 is considered extremely undervalued.
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