Jim:
A few elements which make me feel the company is on a sound operational footing are:
1) Product Revenue, on a discrete quarter basis:
fiscal 1st qtr 98: $1.55 M
fiscal 2nd qtr 98: $1.65 M
fiscal 3rd qtr 98: $2.07 M
fiscal 4th qtr 98: $1.71 M I suspect some sales were recognized only
in fiscal 1st qtr 99
fiscal 1st qtr 99: $2.22 M ditto
fiscal 2nd qtr 99: $1.95 M
fiscal 3rd qtr 99: $1.90 M
Revenues increased and remained at a high level. Not recognized in these numbers are the subsequently announced expansion of distribution networks: the Australasian network, and Pacific Northwest network (Pacific Truck and Trailer). Also the recently announced OEM contract (Volkswagen). These, and similar which may be pursued by TCT, will provide further growth now that the relocation has provided for needed production capacity.
2) Cost of Goods Sold, on a discrete quarter basis, as % of Revenue:
fiscal 1st qtr 98: 47%
fiscal 2nd qtr 98: 48%
fiscal 3rd qtr 98: 48%
fiscal 4th qtr 98: 60%
fiscal 1st qtr 99: 49%
fiscal 2nd qtr 99: 43%
fiscal 3rd qtr 99: 41%
Cost of goods sold is trending down, therefore company is more profitable.
3) Net Income, on a discrete quarter basis:
fiscal 1st qtr 98: $600 K
fiscal 2nd qtr 98: $474 K
fiscal 3rd qtr 98: $463 K Starting to be taxable
fiscal 4th qtr 98: $-428 K Cogs at 60% plus December Debenture Pmnt
fiscal 1st qtr 99: $376 K
fiscal 2nd qtr 99: $ 5 K Relocation costs plus June Debenture Pmnt
fiscal 3rd qtr 99: $471 K
Net Income is generally positive, generating positive cash flow (with further addition of depreciation cash flow).
In a nut shell, the company's business is in the process of expanding, cost of production is going down, company is generating cash, things are looking good (in my opinion).
Tight cash situation is due to 1) need to expand in order to accomodate success - which was done -, while 2) inability to place the Tax Exempt Bond issue, as the U.S. Bond market collapsed -not TCT's fault-.
I don't see any bank pulling the plug on short term cash advances for a company with the above fundamentals.
Just my opinion.
Saverio |
