I am new to this name and have been looking at the #'s. I know there is controversy here--and I would rather not get started on that. I am just trying to understand the cost structure. Apparently CYBX has real sales, which convert to cash. Gross margins are very high, nearly 90%. But they seem to spend a significant portion on SG&A and R&D, and, even after stripping out non-cash option and stock related compensation, it appears that cash expenses still exceed cash revenue. How can this be with such a high margin business? Why are operating expenses so high? It seems they could be reasonably profitable if they wanted to be. What am I missing?
I agree with you, the spending to revenu ratio is very high and the hope is that the new mgt team will cut cost down to the basics and accomplish their mission of making this company profitable so it can become an attractive take-over target. They only have three years left on their Patent so this should be the last chance for them to fix it and sell it. I think this has been the new Board's plan all along, especially when they hired Moore from Boston Scientific with a possible mission of cleanup and assist in a take-over.
What's wrong with the culture of the company? What can't be fixed? Also, for what you describe as 'a marginally effective device', it sure seems to sell a lot of units, no? Perhaps 'marginally effective' is good enough?