Continuation of Q3 observations:
The Q3 earnings release reflects a 30% increase in revenues for Q3,98 compared with Q3,97. However, it is important to remember that Command owned only 51% of the Offshore Indian operation during 97. Command purchased the remaining 49% interest 12/31/97.
In order to calculate true revenue growth from operations we need to compensate for the increase of 98 revenues related to the 49% interest that is being recorded on books in 98 that was not reflected on the books in 97.
According to the 1st Qtr conference call, 30% of the total revenues for the 1st Qtr were generated from the operations in India. Although we do not know if this percentage remains the same for Q2 and Q3 it is the only number that Command has publicly released, and thus it has to be our basis of assumption for Q2/Q3 calculations.
Accordingly, 1998 revenues should be reduced by 15% (half the Indian revenues) in order to reflect a true picture of operational revenue growth over 97 comparative figures.
Q3,98 rev. $8,921,000 less 15% = ...$7,583,000
Q3,97 rev..........................................$6,861,000
This represents an operational increase of only 10.5% for the Qtr.
Does it make sense that true operational revenue growth for the third Qtr would grow at a snails pace when SGA expenses for Q2 & Q3 were rocketing into the stratosphere?
It would only make sense if:
a)The company is extremely wasteful and incompetent.
b)Recognition of increased revenues corresponding to the
increase in SGA expenses are yet to be recorded pending
completion of in process project work.
To be continued.......JAB
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