If they are telling just half the rtuth I can not undertsand what the fuss and what the delay is about.
1. The revenue recognition issue is for India and will have no affect except to push a small amount of services revenue from one quarter to the other.
2. The ubillled hours can only affect the results positively - if a customer pays
3. They have stated performance in line with plan... whatever the plan is
Has all this come about because somone is doing due diligence and loves an excuse to rack up fees?
There are some positive signs from this mess - I just hope the admin costs dont leave a hole in the ship. Any US Accountants out there that can shed light on whats going on?
Share drops below $9 I am buying back what I sold last week.
The problem with additional unbilled hours, is that if the hours were against fixed price contracts, this could cause the gross margins to drop a good bit. I think SABA does a lot of services in India. Similarly, if those folks were charging to R&D, instead of billing against contracts, it will force adjustments there as well. This company has always been a mess. How their board has allowed Yazdani to remain as CEO for all these years is shameful.
Possible - but gross margins dropping will not impact net margins - after all we are only shuffling around costs. Your R&D point may hold some water - the inference though was unbilled hours - i.e. should have been billed to an external customer - not uncharged cost hours from a suppllier. This implies sloppy practice not lower margins - or am I just seeing the cup half-full.