Message #14 From:
Asklepidaurus Date: October 2, 2006 01:19:51 AM
SEVI's Gross Revenue up 20%
Here is the link for SEVI’s 10KSB Annual Report (ending May, 2006):
Gross revenue up 20%: $4,524,662 vs. $3,768,687 for May, 2005
-Consulting division revenue up 3%
-Next Hire division revenue up 131%
[Cost of goods sold up 37%: ($1,597,899) vs. ($1,168,962)]
Gross Profit up 13%: $2,926,763 vs. $2,599,725
[Operating expenses up 20%: ($3,573,244) vs. ($2,979865)]
Gross Margins (revenue-costs of goods/revenue) down 4.3%: 64.7% vs. 69.0%
Operating Margins (revenue-all operating expenses/revenue) down 4.3%: (14.3%) vs (10.1%)
Margins are very important as they indicate the efficiency of the company (i.e making more with less). SEVI’s gross margins are already very good being roughly 2/3 of their revenue and the slight change here appears to be non-significant (i.e. within normal variability). However, if anything, it may be a result of reorganization of the multiple companies SEVI recently acquired. As this period of acquisition/reorganization transitions to a period of revenue growth (as laid out in the company’s strategic plan), we should look for the operating margins to increase.
Current Assets: $5,617,229
Current Liabilities (non-derivative, e.g. loans): $1,392,146
Current Liabilities (derivative): $11,028,086
The estimated value of the derivatives is calculated based on the current stock value. Since the stock price has fallen, the derivative liabilities have increased. While still important to consider, this liability disappears if the stock price goes back up.
Based on actual non-derivative liabilities, the Financial Strength Current Ratio (Assets/Liabilities) is 4.03.
Shares were diluted 2.9-fold from 87 million to 249 million. Expected share value based on gross profit decreased 61% (from $0.0299 to $0.0118). Note: this price was reached in the middle of June and remained stable there through the end of July. The gradual decline during August and September appears to be an overshoot. If so, the current share price of 0.0019 is at a discount of 84%, (not including expected future growth). Were the stock to rebound to actual value at this point, it would bring a 621% increase over the current depressed price.
-Asklepidaurus
