Surprise, surprise, do we actually have some new investors here? According to the 10Q1 MD&A, A/R's rose due to the level of sales activity vs 4th quarter 2011. However when you compare QI 2012 with 2011, A/R is 67% of sales vs 56% of sales. Any way you look at it the amount of A/R's is high relative to Sales. Sales are also concentrated in a few accounts and may have been booked late in the quarter. Historically, collections balance out from one quarter to the next.
I noticed the same thing. However, I don't think as of now there is any real cause for concern and would wait to see the next quarter's results before drawing any conclusions regarding potential trends. If you look back historically at their Qs, every now and then CVR has a similar quarter as this last one where CFFO is negative and a large reason for the negative CFFO being a large increase in ARs. Generally these have been one-off anomalies rather than any trend, with my guess being that since they have a few large accounts, if one of those accounts pays a bill a bit late, from a face value standpoint it can make it look as if CVR is having collection issues while really it is just a matter of timing. I wouldn't be suprised if a big chunk of that AR was paid shortly after the end of Q1 and thus the next quarter should reflect the converse, though I would agree that if there is continued negative CFFO combined with a high AR balance than there may be a red flag.