The quarter was poor from a couple angles. The balance sheet tells the nuts and bolts of the situation today.
Mix of current assets to current liabilities is not good. They are sitting on a lot of inventory going in to slower quarters. Cash + Accounts Receivable are not much more than Accounts Payable. If we add in Accrued Expenses less Prepaid Expenses it's worse.
Go back to balance sheet for the same quarter last year and it's a different story.
Accounts receivable in the quarter has grown by 50% yoy while sales have decreased by 10%. Likewise, at the same time, inventory is up over 20% yoy.
Let me make the analysis simpler. They basically have cash to make a couple of payrollsand they're not paying their suppliers until one of their distributors pays them (assuming they ever pay or are receivables are real). And why do they have so much inventory to begin with compared to their quarterly sales unless they're not selling as much as they thought by now. tick tick tick obsolescence coming your way.