Hi Clement,
last Q, Q/Q sales growth was 26%
Q/Q income growth was 61%
and PM came in at an outstanding 25% (best result ever)
This Q, Q/Q sales growth was 39%
Q/Q income growth was -5% !!
and PM came in at 17% (not bad)
Excluding Nautilus results
Q/Q sales growth was 17.6%
Q/Q income growth was 0%
and PM came in at 22% (great number! 3rd best I think).
So clearly, the margins on Bowflex were "squeezed" 3%
over previous quarter (this is what I meant in my
message). Perhaps the margins of last
Q were simply unsustainable. Perhaps someone here may
call the company and find out why... did this have
anything to do with the beds? Maybe this explains the
sell off. Investors were so used to see Q/Q increases
in both sales and income of BFX line that when the income
growth didn't materialize, they sold off the stock.
So one point is clear, I think: we shouldn't expect as strong
Q/Q increases in sales of BFX line as we saw in the past
(well above 20%). Did things slow down? seems a little...
Input appreciate here: can anyone find out whether the company
is providing any guidance concerning growth of BFX line, Q/Q.
Concerning Nautilus integration. That company was having sales
around 5M/Q and bleeding 1M/Q. So DFX had somewhat reduced sales
but managed to greatly stop the bleeding. This looks like a good
job done. Did DFX say what was their goal on Nautilus PM?
DFX CAN'T stuff the channel with their BFX line as they sell
directly to customers once the product is ordered, right?.
The increase in inventory and receivables must be due to 1)
Nautilus 2) getting ready for beds. Anyone care to comment and check
directly with the company? If sales of Nautilus had come out
in 7-8M range, I would've worried. But they actually sold
less than previous years, it seems. So stuffing seems unlikely.
All in all, my feeling is that the company performed very
well again and it seems the sell-off was an overeaction.
We're again looking at a dismal forward PE (around 10). This thing
gets NO RESPECT! whether it trades on TSE or Nasdaq. Just now,
things will start shaking more.
Output/Input from the old timers appreciated.
The question is: DID DFX STUFF THE CHANNEL?
Trilobyte |
