CRS Electronics Inc V.LED

Jennifer, don't let them con you

[mrmoribund]

Jennifer, I was looking at the Q4 numbers this morning. You can't seriously be intending to put new money into this thing. First off, you have to wonder when the company doesn't break out the Q4 numbers but just gives full year. I know it's done but it always looks like a company is being evasive. So I have to get Q3 and Q4 up on the screen side-by-side and roughly calculate the differences.

So, Q4 sales were $463,000, i.e., they're absolutely collapsing. A gross loss of $750,000. Some of the ugliness lower down the income statement may be one-time related to the move to China, but let's not kid ourselves. This kind of cash hemorraging might ultimately be survivable if CRS were developing some world-beating product. But it most certainly is not. Or maybe if it were building operations in a way that would give it a lasting cost advantage. Fat chance--Cree and Philips moved to China a long time ago. There might be a chance if Cree and Philips were standing still in terms of technology development. Nothing could be further from the truth.

Jenn, you might want to think about hanging onto your cash. Once you put it in, the investment will look nice for a while given that you're buying below the market. But I suspect you'll never see a penny of that $3 million again.