Puzzled....Hello to all long term holders,
I am puzzled to say the least. An increase of 80% on gross margin from a revenue deminishing quarter??? Normally, you would see gross margin deminishing with a deminishing revenue. So i need to review the financial statement very carefully because all this revenue now, had very little cost to it and that is very odd. I was expecting a loss in this quarter and this is now a red flag to me unless Mr. Dyment can explain to me in a way that a six year old kid would understand. One can play with inventory and recognize revenues ahead of time and not recognize certain costs but eventually it catches up to you and any subsequent quarters will be affected by this unless revenues starts catching up in a very fast way to compensate. Needless to say, I need to do more Due Dilligence now because this is very concerning to me. As most know on this BB, I am normally very positive on the company and I am a believer but such a huge change in gross margin is very odd. This anomally has opened up a can of worms with me and this reminds me of a company called Northern Telecom (Nortel) and I am not saying GSI is doing anything wrong but this huge change in gross margin over one quarter is raising questions for me.
I am still long but this is a concern of mine now.
Regards
Fearlessgg