I know the margins on the contract arent goign to be normal margins, but I will assume so for the math.
GP will be 5.4M on going. SAGE are 8M MISC are 0.3M
There needs to be 3M in overhead cuts to break even unless the sales can be replaced. Manufactory cuts will be need as well with less volume. Those cuts dont count since GAAP is going to have a lot of those wages put into inventory.
That mean 3M a year in corp offices, sales teams, and so on. They can cut shipping cost(less volume), RD, and advertising, but they are only gonig to get 500K from this.
I think they are in real trouble. I dont seeing them being able to cut enough cost. Replacing 55% of your sales is going to be tough as well.
I honestly dont see them making it unless management is very good.
I bought a little ALGI around 9-10 a few years ago. The price ran up on me before I got a full position. I sold almost half yesterday at 8.17. It's not cheap unless there's some way to win the USPS business back.