How does one become a "guru"?
. OPERATIONS OF LAPTOP SOLUTIONS-TEXAS
Laptop Solutions-Texas' results of operations for twelve months ended November 30, 1997 and 1996 are summarized below:
1997 1996 CHANGE (%)
----------- ---------- ----------
Sales ......................... $ 3,339,599 $3,576,722 (7)%
Cost of sales
exclusive of depreciation
and salaries) ................. 1,696,279 1,419,446 20 %
----------- ----------
Gross Profit .................. 1,643,320 2,157,276
(24)%
Operating &
Other Expenses .......... 2,469,214 2,155,458 15 %
Net Income,
before income taxes ...........$ (825,894) $ 1,818 --
LOSS =========== ==========
SALES: Revenues for enhancement and upgrade increased from $1,470,127 in 1996 to $1,565,284 in 1997, an increase of $95,157. Sale of units continue to increase while the per unit revenue and gross margin declined as a result of competitive pressure. Revenue from Compatibility Plus(TM) sales, the removable hard disk pak
that began shipping in the fourth quarter of 1996, increased to $318,324 in 1997 from $87,071 1996, an increase of $231,253. Revenues from non-warranty repair and contract maintenance services amounted to $751,661 in 1997 as compared to $1,353,306 in 1996, a decrease of $601,645. Management believes that the decline of non-warranty revenue was primarily the result of manufacturers extending the
warranty period from one year to three years and users being more inclined to replace a three year old unit that is technologically obsolete than to purchase upgrade and enhancement components. Warranty repair revenue for 1997 amounted to $544,274, an increase of $81,390, from $462,884 in 1996. Revenues from asset management services amounted to $119,600,
-10-
a decrease of $30,063 from $149,663 in 1996. All other services decreased $13,215 from $53,671 in 1996 to $40,456 in 1997.
COST OF SALES: Cost of sales of enhancements and upgrade services increased $399,140 to $791,703 from $392,563 in 1996, primarily as a result of competitive pressure. Cost of sales of Computability Plus(TM) increased $140,472 to $186,055 in 1997, from $45,583 in 1996. The increase was the result of increased sales.
Cost of sales of Non-warranty and contract maintenance services decreased $220,507 to $497,986 in 1997 from $718,493 in 1996. Cost of Compatibility Plus(TM) amounted to $186,055 in 1997, as compared to $45,583 in 1996, an increase of $140,472. All other direct cost of sales, primarily freight expense, decreased $42,272 to $220,535 in 1997 from $262,807 in 1996.
OPERATING AND OTHER EXPENSES: Salaries in 1997 amounted to $1,217,177 as compared to $1,148,181 in 1996, an increase of $68,996. Personnel and related cost increases were primarily due to salary and cost of living increases. Rental increased $5,294 from $168,739 in 1996 to $174,033 in 1997. The increase was primarily the result of a new lease for the office and warehouse space. (see d. below for more complete detail) Advertising increased $69,568 in 1997 to $233,322 from $163,754 in 1996. The increase was a result of management's
decision to place additional advertising commitments in the third and fourth quarter of 1997. Computer expenses increased $25,611 to $93,884 in 1997 from $68,273 in 1996 in a continuing program to enhance the capacity and capabilities of the Company's information system. General insurance increased of $5,114 in 1997 to $34,216 from $29,102 in 1996. The increase is primarily the result of increased coverage. Health insurance increased $50,479 in 1997 to $88,236 from
$37,757 in 1996 primarily as a result of increases by the insurance carrier. Miscellaneous Expense increased $38,236 in 1997 from $(605) in 1996 as a result of settling an EEOC complaint by two former employees. Professional Fees Decreased $42,042 in 1997 to $50,874 from $92,916 in 1996 primarily as a result of lower legal fees. Recruiting expense increased $12,480 in 1997 to $23,357 from $10,877 in 1966 as a result of higher employment and difficulty in
recruiting employees. Laptop Solutions-Texas was charged a market rate for its office and warehouse space by the Company in the amounts of $104,000 for fiscal 1996 and $60,662 during seven months in 1997 and such amounts are included in Operating and Other Expenses. Other operating expenses, included, professional and consulting fees, travel, telephone and other general and administrative
expenses, increased from $501,394 in 1996 to $515,879 in 1997, a increase of $14,485, primarily as a result of increased general overhead expenses.
Management believes that for Laptop Solutions-Texas to achieve profits similar to prior periods will require greater volume than was required in the past, and there can be no assurance that Laptop Solutions-Texas will be able to achieve such volume.
-11-
B. OPERATIONS OF LAPTOP SOLUTIONS-CALIFORNIA
Laptop Solutions-California's results of operations for twelve months ended November 30, 1997 and 1996 are summarized below
1997 1996 (%)
--------- --------- ------
Sales ............................ $ 1,109,910 $ 431,788 157 %
Cost of sales
(exclusive of depreciation
and salaries) .................... 665,847 219,823 203 %
--------- --------
Gross Profit ................... 444,063 211,965 109 %
Operating &
Other Expenses ................. 771,989 440,275 75 %
Net Income before
income taxes ................... $ (327,926) $(228,310) (44) %
LOSS =========== =========
The Company in 1996 formed it's Solutions Engineering Division, and it's management, technical and administrative personnel are included in Laptop Solutions-California's operating expenses.
As one can see from the company's financials, Laptop is neither a large company nor a successful one. If they would rid themselves of the hype and deleat some of the bravado, the company could be perceived more honestly.
"High Tech Guru Named President and COO Of ZULU-tek; Appointment of Kevin R. Rogers Marks Significant Step Forward in Company Growth Plan
BusinessWire, Tuesday, March 17, 1998 at 08:09 ' |
