Dynamic Technologies Group Inc - Class A ERILF

RE:RE:Profit Margins - VERY LOW !!

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InstitutionalPM wrote:
Historically they had three businesses with media based attractions generating the highest margin and hydrovac trucks and steel fabrication generating much lower margin. Now they have spun out hydrovac and wound down steel fabrication so it is a pure play media based attractions business so that will help consolidated margins. As well, their margins were weighed down by first generation ride systems and as they produce more of these rides a second and third time the margins will improve. Lastly, they have operating leverage, so profit growth should further outpace revenue growth. GLTA

I heard an interview with Empire's CEO in which he said that the first time they implement a ride there is a lot of R&D and learning done that they cannot charge the customer for.   After they turn the concept into a finished product that they can sell to the next customer, they have much lower costs and margins improve.