OTCPK:NTSFF - Post by User
Post by
93Darkhorse93on May 30, 2016 11:45pm
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Post# 24918109
Gross Margins Expand to 52% with Hueck Folien Ready to Go...
Gross Margins Expand to 52% with Hueck Folien Ready to Go...At first glance the numbers didn't look so good but after digging through the MD&A its looks like nothing more than a transitional Q setting up for strong growth next Q.
The gross margin expansion to 52% is real impressive in the face of weak sales gives them a path to profitability once sales begin to ramp as the financial leverage is inherent within the business model.
The surveillance revenue decline was solely a timing issue as 4 vehicles were delivered in April so I have no worries about that.
The Security Feature revenue was down but it is a transitory supply issue not an inherent demand problem from the roll out of the Hueck Folien plant. Management stated that the plant was complete post the Q and the roll out will begin this summer. This sets up strong for both parties involved as the rollout begins this summer.
Just thinking back to 2016 Outlook that management gave last Q; stating 2016 revenues would double this year it would be foolish to give up on this company right as they finally complete their production facility. The next quarter could very easily dwarf its prior two Qs. Clearly management saw something down the pipe to guide to that figure.
Trading might get choppy based on the headline number but I will be looking to add as the set-up into the remainder of the year looks strong with the rollout of the Asian currency produced through the Hueck Folien facility.