Gatekeeper Systems Inc V.GSI

Potential Profit from Q4 News Release

[RogersBulll]

Considering Q4 revenue will be $11.5 mil, we can assume the gross margin will do 1 of 3 things.

1 - 40% (lower than normal to win new business).
2 - 45% (in line with recent quarter - Q3).
3 - 50% (which is the average in last twelve months)

For Gross Profit:
1. $4.6 mil
2. $5.2 mil
3. $5.75 mil

Operating expenses have increased to $3.1 mil in Q3. So lets assume they are even higher in Q4 at $3.5 mil.

Net profit:
1. $1.1 mil
2. $1.7 mil
3. $2.3 mil

Full year profit:
1. $4.2 mil (4 cents per share)
2. $4.8 mil (5 cents per share)
3. $5.4 mil (5.5 cents per share)

[Ciao]

Why would you expect higher expenses in Q4. Most of the one time costs to migrate to the data center should have been finalized by Q3 at the lastest as well as all the major hiring and presence at trade shows.

[RogersBulll]

It's being conservative. Keep expenses the same and all those numbers get higher (even better). My post illustrates that on a very conservative basis, Gatekeeper's year end numbers are going to look stellar.  Also, I am inclined to believe that expenses will not go down. The additional spending on sales staff is permanent employees (recurring) and trade shows should continue all year