2nd Quarter Results & Conference CallData Group continues to see falling total revenue, there is negative growth. Although they reported having completed annualized cost reductions of $12 million, they failed to mention when these cost reductions went into effect, none of it shows up in Cost of Revenue or SG & A percentage reductions in either Qtr 1 or Qtr 2 . At the very least they should have said going forward our Cost of Revenue and or SG&A would fall by upwards of $1million per month if in fact they have made cost reductions. Data Group failed once again to provide suffucient information to support the share price when given the opportunity to do so when questioned.
The following chart shows no indication of reductions
QTR 1 2013 QTR 2 2013
REV 82.9 77.8
COR 61.1 73.7% 58.1 74.6%
SG&A 15.7 18.9% 15.3 19.7%
TOTAL 92.6% 94.3%
QTR 1 2012 QTR 2 2012
REV 86.6 82.6
COR 63.4 73.2% 61.5 74.4%
SG&A 16.9 19.5% 16.4 19.9%
TOTAL 92.5% 94.3%
Looking back to 2 nd qtr results 2009, Cost of Revenue was 74.6%, SG&A was 18.6%
Looking at 2nd qtr results 2013 Cost of revenue is 74.6%, SG&A is 19.7%.
Conclusion in 4 years no major new client added, no productivity improvements, no real cost reductions, reduced revenues, reduced dividends and increased management costs of approx $1 million per year share price drop of 55%
Unless otherwise stated the reductions they speak of today are primarily buying less material and employing less people because sales are falling, anyone can do that. Transfering operations and closing plants should result in reduced lease costs on a monthly basis hopefully this information will be reflected in future financial reports. In the mean time the game of smoke and mirrors continues.
Comments would be appreciated.