GREY:SYXXF - Post by User
Comment by
mrholtyon Jun 13, 2014 4:52pm
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Post# 22659274
RE:RE:RE:Why I like SYD
RE:RE:RE:Why I like SYD
I wish I was as positive as all of you. I have a small position (1/3) that I started after Q1 of 2013. Q2 2013 caused me to pause and not fill out my position and I still can't.
I really like the growth in contracts signed especially the $1.2M for 12,500 km. That is a rate of $95/km. I had been using $75 in my models to be conservative. I had estimated that they had done 10k km last year and are close to 25k km this year. (I could be double counting some of the contracts as its hard to see what is adding to what and not double counting).
If we assume that the 12.5k @ 95 is half of sales and another 12k is at $75 we get sales of $2.1M. I'm using a 40% margin even though the average over the past few quarters is just under 50%. All of this is good.
The problem is the expenses. In 2012 the Office/R&D and Sales expenses were about $500k/quarter. Our last three quarters are over $700k/quarter. This is unacceptable. Expenses are growing way to fast. If they can manage to keep these expenses flat to break even they would need $5.6M in sales in a 12 month period assuming 50% margins. 40% margins would require $7M in sales. That would be 30 months away if they double annually as their sales are weighted in Q3 and Q4.
This business can't grow like we all hope unless they reduce the Office Expenses. Writing this post makes me sad.