August 9, 2012, after the close thursday, we will see another 2 million dollar loss, with lower revenues, and more talk of growth.... Reverse split? Bankruptcy? Delisting? All of these topics will be down played or avoided all together. putting lipstick on a pig. Once again shareholders will be hoodwinked.
How exactly are they going to report a 2 million dollar loss?
Last years second quarter sga was 3.2 million dollars,included in that was the half million dollar payoff to the Nets,throw in the fact that the company had 40% less staff than it did in the second quarter last year.
To end up with a 2 million dollar loss they would need at least a 50% drop in sales , very bold prediction.
Realistically looking for the loss to be closer to 1 million than 2 but the most important thing for the company is if they can show sales increases with the smaller staffing levels.
The real question I have is whether the CEO left because the numbers were bad or because the company was channel managing to push numbers into the second quarter to try and sell more shares just like the first quarter (based on the 4th quarter numbers).
Believe it or not Nutjob has the best access on the board to know whether that happened. Last years large core sales increase in the first quarter was due to heavy placement at new vendors.In the first quarter of this year there was no indication that any of the new authorizations shipped in the first quarter.At the beginning of the second quarter there were the promotional visits in Florida to place the product back in more Walmarts but no one has mentioned whether the product ever ended up at a significant number of Safeway's or Publix.If product was shipped to a significant number of outlets there could be a positive top line sales surprise, if on the other hand it is like the original Walmart authorization there probably won't be.Remember when you back out the sales in Canada and overseas this company only sells in the neighborhood of 6 to 7 thousand dollars a week per state.
The other long term question is about the cuts in the field.While the cuts in the home office should not have that much of an effect in the field they appear to have cut all of the front line sales people and held on to the management.If the management level people are not ready to be boots on the ground sales reps the situation will only get worse.