You misread my post. I said it would be better for them to flounder along than to sell at these low levels. I've wanted competent leadership for at least five years, but we've been stuck with Tom and the stock is weak. I hope they can find a competent leader, but I'd rather let Kathy run the show than to sell for less than $3.50.
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Let the company flounder along without leadership??? Ridiculous. LRAD has very good product, very good technology and cash in the bank. They need a real leader, not just a manager.
FWIW, I'd be more than happy to accept a $4.00 per share buyout price and move on but anything less than $3.50 and I'm not going to vote my shares for that transaction.
If they truly have a portfolio of products worth managing, then they can hold out for the right candidate. But I hesitate to hold my breath because it seems like there was little if any planning done prior to making the move to remove Tom.
The company is worth so little at this point, there's little advantage to the shareholders if the company were to be acquired now. Selling at a position of weakness is a bad strategy. It would be better to let Kathy or the general run the company until they can get some momentum from an upswing in revenues. Based on their historical revenues, they've never needed Kathy and Tom, ie their contributions are/were redundant, so they automatically would be improving their books by lowering their sga. Regardless, unless they can turn some of the "alleged" opportunities jamming up the pipeline into revenue, they should initiate lay offs to help the books look better for a few quarters and then sell.
My guess is that no announcement regarding a new president means the company has decided to be acquired. Large stock holders have had enough and pushed for a sale. Only a guess but why such a long delay in finding a new boss.
just read the title, it say's it all
POSiTive ARTicle on LRAD FUN DAMeNtalS at PENNY STOCKsWEEKly
"POST-ART LRAD FUN DAMNS PENNY STOCK WEEKLY"
Old product, Lrad having funny games but wasting your time and money, and a financial supportive consortium of insiders brick wall blocks this from being a penny stock every week it is traded, for now!
GLTA but expect sideways for a time on this POS stock, company and group of marketing ID10T5
Sentiment: Strong Sell
Its going to take a lot more than $1.5 million in sales to make this thing hum. Even adding a zero won't get them to their sales from two years ago, and they are in real danger of not eclipsing last year's revenue and earnings debacle. In case you didn't notice, they only have four months to go.
in a week. $1.5M+ in sales, and it is not even quarterly release time. Could this be some momentum building? Tom setting up his successor for success?
When I first invested in this company, they were set up to license their technology, not manufacture it. They still can do licenses, but they have to design a better mouse trap. Not sure if it possible, but it won't happen unless they try. Their margins on these products will be irrelevant, as they will be collecting royalties.
If this is as large as the market is for their core products, then they should reduce staff and figure out how to be a more efficient manufacturer, because the revenue isn't streaming fast enough to support their current manpower.
I agree with your point that it seems simple...
My professional experience is in high end security camera markets. Companies that are highly successful at rebranding lower cost products generally have either huge distribution reach or they have some control over the purchase (such as a GE branded security system will use GE branded components). LRAD has neither of these and I doubt their great name in maritime translates to sales in other markets.
Also don't forget the phenomena of margin stack, if you resell others products, the OEM needs to make a decent margin for your venture to be successful. Is it not reasonable to assume that LRAD's margins on reselling lower end products will be lower than the margins they enjoy today?
It's absolutely possible for them to be successful by adding complementary resell products. However, I can give you countless examples where the strategy just hasn't worked. Even if it works will it move the needle?
I don't see LRAD winning by being a me to player in a larger market. Be patient and look for the next niche to dominate. As long as they maintain their existing niche profitably then they have value.
LRAD: be cautious about the future. Some big decisions are going to be made and you need to look before you leap.
I wish you all (employees and investors) nothing but success.
You're making the assumption that they would be manufacturing it. They are certainly not set up as a low-cost manufacturer but I'm supposing they could find one if they try real hard. Maybe one of their partners in China knows one.
If they've exhausted their revenue opportunities with the products and markets they are already addressing, then they need to expand their portfolio and/or reach. Seems pretty simple to me.
You are correct about too much information - Kathy gave away the value of a project and the qty of units which makes me think pretty much anyone with a calculator can figure out the cost per unit.
I just want to supply the other side of the coin for consideration. I used to run a company that manufactured high end security based products sold to essentially the same customers as LRAD. I feel their pain! Because of their unique niche, LRAD generates huge gross margins. If they start moving down the technology pyramid to reach the mass markets then they could be looking at product margins of 20% or less because the most important criteria for a sale will be price. Are you prepared for that? I'm not saying it can't be done successfully, I'm just saying that's not their core competence and the probabilities against success are stacked. This path is fraught with peril!
I'm not intimate with the exact market for their product but I have a couple of suggestions to offer:
1. The sales group seems to be desperately chasing after anything they can get their hands on. Slow the chaos down a tad and develop a new strategic plan for realistic growth. In the meantime, get your EBITDA to 15%.
2. Instead of joining the mass markets, figure out how to get mandates that require local agencies to procure high end products. If you haven't already, hire a lobbyist. You would be surprised at how many of the successful players in the security industry do this, although it's usually on the down low.
3. For goodness sakes quit talking about specific opportunities in the earnings pressers! Your sales cycle is long and undependable. While it may be exciting to do so, talking about specific sales opportunities sets unrealistic expectations and it's no win. Talk about the markets instead and everyone will have a realistic view of what's happening.
I wish LRAD and its investors nothing but success. Good luck all!
I've been researching this company for a few hours now and I'm questioning how big their serviceable market size actually is? While the TAM is quite large could it be the SAM is puny? I haven't been able to find any of this info in their presentations. Anybody know?
I also would offer an opposing opinion of the CEO. Except for the fact that he's not a marketing genius the rest of the operations look outstanding. The general presumption from the investor community seems to be that LRAD is leaving sales opportunities on the table but I don't see it and I don't think the intelligent people at LRAD are incompetent.
Be careful of what you're asking for in the next CEO because you just may get it! The real issue here might be the size of their SAM. If growing SAM means higher volumes at lower prices then do you want to chase down that rat hole? Perhaps LRAD would be better off as a private company in a fantastic niche market. JMHO
I think his point is that sales have already dropped off. Lumpiness aside, if a product is gaining acceptance, sales trend upwards. Hence the need for diversification in products and markets beyond their current situation.