CalculatedRisk says:
Tava [has] poor gross margins (about 35%)...
TAVA's Doug Kelsall:
In the gross profit line, we had gross profit in the quarter of 3,677,000 or 35.1 percent of revenues. Gross profit did increase 45 percent from our fiscal Q2 1997.
Q1, '98 to Q2, '98 our gross profit declined by $148,000. However, the gross-profit margin increased from 34 percent in Q1 to 35.1 percent in Q2.
Again for analysis purposes, when I look at our numbers internally, I go through an analysis and assume that we have a 10-percent markup on materials and look at what kind of gross profit margin that gives us on our labor services. And going through that analysis for Q2 would suggest a gross profit on labor services of 54 percent.
We did have some inefficiencies in the quarter, which we talked about in the press release, which impacted gross profit and gross profit margins, included training of our engineers on Y2K as well as general resource mobilization and rapid deployment for some of the pilot plants that we had engaged during the quarter.
We would expect to see gross profit margins improve as we work through some of these inefficiencies, add additional product sales to our revenue mix, and also additional Y2K services at higher margins than our core business.
(from Conference Call) |
