"Autoleave" ???---that's rich !!!
Steve Barnes over on Motley Fool (AOL) has answered my margin questions:
Subject: Re: Simula Conference Call Question
Date: Tue, Mar 31, 1998 18:12 EST
From: SBarnz
Message-id: <1998033123122901.SAA10822@ladder01.news.aol.com>
Yo! Mike,
Sorry for the delay in getting back to you on this.
As we discussed here in Phoenix, I have lost a significant amount of confidence in this management. Significant. I simply do not believe they have a handle on the details. The most important move that could restore some of my confidence would be to implement the kind of enterprise software system that allows Sean and Don to know what is happening on a timely basis. But the mere fact that they have not done this so far seems to limit any eventual
confidence I might develop as a result of such. This is a massively disappointing stock, for me.
In other words, I do not believe the move to the new plant is the silver bullet it is being made out to be. I do not deny that there will be efficiencies achieved with a consolidation of manufacturing under one roof. . . but I believe the problems go much deeper than this.
On other topics, where are the other ITS announcements? This is another disappointment.
To be clear, despite the fact that I sold a significant percentage of my position in this company last September, I continue to hold a very modest position. I have no plans to sell this position at the current price and continue to watch (and hope) with great interest.
Maybe my best hope is that Mr. Desjardins is getting tired of the flak management regularly takes and will eventually sell the company. I would love to see what different management could do with this incredibly promising technology.
You asked:
Would someone smarter than me compare and post the gross and net margin percentages (net of extraordinary items, if any) for each quarter of 1997 ???
I ain't smarter than you. . . but gross margins for 1997, quarter by quarter:
Gross Margin Revenues
1Q97 28.4% $17.826mm
2Q97 31.9% $20.065mm
3Q97 14.3% $23.643mm
4Q97 19.8% $28.888mm
I don't recall any extraordinary items in any of these four quarters, but I could have missed something. I did this on the run, as I am five minutes from heading over to BankOne Ballpark for the season opener. So forgive my mistakes made in haste. (Incidently, I don't have this information broken down by product line. . . I think SMU stopped making such distinctions about a year ago.)
You said: If margins are increasing, on increasing revenue (and that continues), then we will be fine and the company will succeed.
I tend to agree, and note that margins are significantly lower on higher revenues. Thus, I agree with your next statement, which was:
If margins are decreasing or unchanged, on increasing revenue, even if we are netting more dollars, management has not figured out what to do (and if that continues, we will all lose money).
Then you ask:
So, what is the reality to date ???
And the answer, IMO, is inconclusive. But it is increasingly persuading me to believe this company will not get where I want it to get under current management. The jury is out, mind you. But present management's case is becoming increasingly difficult to win.
regards,
stephen barnes
P.S. - please be advised that principals, employees, affiliates and clients of my firm may have positions in securities discussed herein and may make additional purchases or sales in the future. |
