Q: Please comment on the 1st q results released today. Do these dry bones have any potential life ( you need to know the Bible to get the reference)?
5i Research Answer:
Loss was $354,000 or 1c per share, compared with a loss of $16.2M or 33c per share last year. Revenue rose 54% to $13.4M, just short of estimates. There are still seven analysts on the stock, despite market cap of only $23M and a 70% one-year decline. The revenue growth is nice, but we note the high debt level ($90M) and the negative cash flow (last year -$7.6M). Gross margin did increase 5 points to 90%, customer growth was 13% and recurring revenue continues to increase. We would consider small cap and financial risk far too great here, and would not endorse it.