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Pro-Dex Inc. Message Board

  • mulligan994 mulligan994 Sep 14, 2007 11:42 AM Flag

    Leverage---what it means to PDEX

    I start to get excited when I think what this company can do because of the leverage it has built into such a small OS number.(around 9 mill. or so) For ex: They have built the warranty reserve fund up to $469,000, up from $402,000 last qtr. even though the product responsible for the whole mess has been revamped and the new improved product has been shipped since March. Murphy said yesterday they look thru a six month window to evaluate the quality of shipped product and thus far they are pleased with the lesser incidents of failure in the field. Just think of what the bottom line will look like if we can return those ear-marked reserve funds back into earnings or better said, at least most of it. Of course leverage works both ways but this company has already suffered from the damage that negatve leverage brings on. $21 million in sales and they are just gearing up for much higher levels. Oh my, if they can transform this $1.50 company into a money maker we are not just talking pennies here. Predicting a future stock price is folly but I can ue my imagination when I see much larger figures on that bottom line and it is all good.

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