RE: RE: RE: Q2 CC It comes down to if you think 2013/2014's profits will justify the investment in R&D, Marketing etc. At the end of the day you have to ask yourself what shape the company would be in today if they didn't make the investment. Having said that there have been some unwise choices (Earthworks anyone!?), but not all R&D projects will be successful, and that goes for any company (that's why it's called R&D rather than product creation). If HEM were to cut spending, the business would never achieve scale and the company would achieve profits only until the business eroded into obscurity. So, as a going concern the business needs to spend on these areas. Whether they could have done so more efficiently though is another issue.
Net net, if in 2013/2014 revenue growth occurs from this years product launch + new distribution agreements and the business has sufficient opperating leverage you suddenly get a meaningful business with future potential. Cut now and yes you'll get a near term earnings lift (and a substantial one), but the company would then have maybe a 3-5 year life tops and investors will sell off the stock to nothingness. As SK accuratly said, this business is driven from innovation and if they don't keep up then there will be no business left. Fortunately Outback Max is really looking like a winner to those I've spoken to who know far better than I.