It's the Monster Backlog that blew away all analysts today
When the hell did I equate inventory to backlog? My question was: How is a greater backlog better? The answer is that a larger backlog is not necessarily good in the sense they cannot catch up with orders. During the CC, they also mentioned a larger inventory as well... What a bunch of pumpers!!
Ok I here your concern. Backlog is an issue if you do not have the capacity to manufacture and ship the orders as committed.
They have facilities and are only running on 1 shift right now. They have the capacity to ramp up. The concern here is trained workforce that can produce product in time and on time.
Bigger backlog equates to bigger inventory. You can't feed an elephant on peanuts from the peanut vendor unless the peanut vendor owns a peanut farm which is hopefully around the corner.
Supply is one of the biggest wild cards here.
With all commodities off the charts in price right now, and the perfect storm brewing for Capstone, everything coming together at the right time in the right place with the right people, or as King educated me today, a dynamic inflection point, supply will be a KEY issue for success.
Also the Cost of Sales which is also rising as it gets more and more expensive to travel and ship demo turbines all over the world. The COS MUST be incurred to get the product out there.
The execution of the fundamentals of manufacturing are crucial here and finding new ways of doing it better, faster, cheaper with the utmost level of quality. Always employ the basics, implement best practices, measure, measure, measure and make them better.
These things are now the what is important to PPS and maybe, someday dividends.