Turn-key systems putting heavy pressure on payment terms - actually when looking at those Reliance order I have problems getting the rationale for the deal. Margins are disastrous and the company gets not paid within an acceptable time frame. But this will be gone in Q4 anyway.
Cash flow to remain negative in Q3 - cash balance will be down to $30 mln - rest of available credit line will be fully utilized in Q4 for working capital purposes.
Company is still guiding for operating cash flow break even in Q4 but that excludes the painful reality of the business with ever increasing working capital needs and the exclusion of payments due to Nokia.
The conference call did nothing to increase my confidence into the company or its management as things are going as poor as always. Selling products at huge losses to pump up the top-line won't work going forward.
obviously their banks are clueless either as they didn't took out the EBITDA covenants :-)
has been unable to obtain a waiver so far...
But there's more bad news - organic growth has weakened significantly, costs are escalating and internal controls show material weaknesses.
more revenues at low margins just mean more net losses, more working capital requirements and even higher cash burn. Calculating with current margins the company might utilize another 10-12 million dollar in cash next quarter. There's zero chance for cash flows to be positive next quarter. Sell.
it won't - brutal cash burn and poor margins are almost too bad to be true. If they don't give posittive margin and cash burn guidance for Q3 the stock will sell off heavily tomorrow.
Company also utilized another $4 mln of its credit line during the quarter. Next quarter might see another cash burn around the above stated number and a new secondary pretty soon. What a shame of a company
No - it only sounds impressive - you need to look no further than to today's press release to see what is really going on.
Most of the new revenue streams obviously are coming from the ill-fated Nokia channel which means Nokia gets 50% of every gross profit dollar earned there - using the Nokia channel makes DRWI effectively selling products at a huge net loss.
The strong revenue guidance is most likely due to the finaly delivery of the Reliance India order which is also low margin and after that revenues might fall off a cliff in Q4.
So expect more pain for DRWI shareholders tomorrow.
They took in US $26 mln through a secondary offering so they burned a whopping $8 mln during the quarter. If margins don't improve significantly in the next quarter the company might burn even more money as the ongoing revenue ramp again will need more working capital. At current margins the cash break-even level might be around $70 mln in quarterly revenues at the very best.
If the company guides for ongoing weak margins and another huge cash burn tomorrow I would expect the shares to sell off sharply as another offering would be needed pretty soon to cover the ongoing cash losses.
Revenue guidance again looks good but with no gross margin improvement the company will burn even more money next quarter.
nice - up another $20k already within an hour - looking for new post-Ch11 lows today
August 2014 - I would guess that GTAT faces similar claims from all nearly all sapphire customers. And that's also the reason why they took all previous sapphire orders out of backlog...because their technology did not work (not because of customer financing issues).
Wondering why they did that Apple deal then when knowing that their furnaces don't work as needed...
I am heavily short again - the stock has already made my me a fortune but I am still looking for more
only an idiot cares about the past on the stock exchange - what about Q4 ? They will book giant losses.
it will be MUCH lower within a few weeks - or why do you think the share price has come down by 50% within weeks ? The complete picture has changed. Q3 might see some small profits for the last time but that's it for the foreseeable future. Long term PEIX shareholders are used to quarterly losses but people like you won't be too happy I guess.