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Universal Security Instruments Inc. Message Board

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  • mmmparsley mmmparsley Feb 27, 2009 7:24 PM Flag

    Ludicrous Drop Today

    6. I thought that Eyston may be supplying the Japanese markets, but I was wrong. Eyston is still proactively seeking licenses in this market and Chinese markets, but no time frame for potential success can be estimated according to the CEO. Universal has little to say in the matter, as license approvals are being sought by their JV, of which they have limited control. Grossblatt agreed that at some point this process should increase equity stake in the JV and boost their sales robustly. If licenses are approved and Eyston markets are expanded concurrently with a US housing rebound, or simply the anticipation of one, in the next 1-3 years - this stock may reach new highs.

    6. Net Income. Net income for the three and nine months ended December 31, 2008 were $1,273,660 and $3,592,801, respectively, compared to $1,120,235 and $2,991,477, respectively, in the comparable periods last year. The 13.7% and 20.1% respective increases in net income for the three and nine month periods were due primarily to changes in the mix of products sold and gross margins as noted above


    while on the Liquidity front, Cash needs of the Joint Venture are currently met by funds generated from operations. During the nine months ended December 31, 2008, working capital increased by $2,740,191 from $8,953,871 on March 31, 2008 to $11,694,062 on December 31, 2008. Earnings at Eyston are approaching levels (approx 33% less) than when UUU was trading at 30$ per share. Meanwhile they are as liquid as ever as working capital is at a record high. I'm not sure why UUU only added 460-470K to earnings from the JV, but actual earnings were $1,273,000.

    That's all for now.
    Dave

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    • I realize that 7 comes after six. My apologies.

      • 1 Reply to mmmparsley
      • In your post you mention that Home Depot shifted from stocking 150 units to 50-100 units of each item and ask "Does it matter?" The answer is clearly yes.

        Home Depot has about 2300 stores. A decline from 150 just to 100 units per item in inventory means a reduction in 115,000 units per item system wide at HD. This is a one time thing, but even if the price per unit sold by UUU to HD is only $2 (and I bet it is substantially higher), that means a reduction is sales during this inventory shift of about a quarter of a million dollars per item. How many items does UUU sell at HD? I do not know, but assuming it is five, then there should be about a hit of 1.25 million dollars to sales. Will this be offset by the two new products? And if HD goes to an inventory of 50 rather than 100 (which would still fit within your statement), the hit would be 2.5 million dollars.

        Look, I cannot tell the real impact of the HD shift, and I do not know when it began. I do now, however, that it is important. It wil lead to a one-time down turn in sales.

 
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