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RandyKCMO

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RandyKCMO

Re: ProfitScout post# 364

Friday, 04/04/2008 3:26:08 PM

Friday, April 04, 2008 3:26:08 PM

Post# of 2559
Hey Profitscout...I think the point Carl was making and one I know you know....is that talking about making profits and reporting audited financials with profits are two entirely different things.

Companies are legion that talk about making money down the road..or this year or next year. It becomes an issue of are we a developmental company...or one that is functional. If we once start reporting consistent profitability...the fat lady will be singing and we will be on our way to .25-50 cents...and longer term to a buck (why stop there?).

SMART MONEY WILL FIND THE VALUE.

The question to be calculated...figured out preferably before it happens....is, "Will DRGP actually be reporting profit in the next few quarters?"

I think the answer is already contained in the financials that have already been released.

1. Look at the Growth in Revenue. Simple arithmatic is amazing.
2006 $12.2 Million Revenue
2007 $20.1 Million Revenue

2008 Q1....What we know so far...$4.1 Million in Revenue for January...just one month...of three...Let's just suppose we get $10 Million Revenue for the Q1....that's nearly 1/2 the revenue of all 2007 IN ONE QUARTER. Very Good news. Will it be profitable? We'll have to wait and see...but I'm thinking so.

2. Look at the growth in the Gross Profit Numbers....
$12.7 Million in Gross Profit for the year...
$4.8 Million in Gross Profit for the Forth Quarter...

Means what? Mean 63.2% of their annual sales and 64.8% of the Forth Quarter sales was money available to pay for their marketing and management expenses.

3. Look at Operating Loss...For the both the Year 2007 and the Quarter, the Operating Loss was cut in 1/2. It was reduced in 1/2 from $2 Million in 2006 to $900K in 2007 and for the Fourth Quarter it was reduced from $900K in 2006 to $500K in 2007. During the Conference Call it was stated that a substantial part of this amount was the result of a $200K restatement from a previous quarter. If you factor this in along with compensation based expenses, DRG actually made a profit in Q4 2007.

4. Also mentioned in the call was the fact that they have raised the price of one of their items...and have actually attained a higher closing sales rate. If this was the Riddex or ProCede product....add this percentage to the amount of revenue being generated and it should flow almost directly to the bottom line.

5. Oh yeah...how about the progress made from the end of Q3 to the end of Q4:

Change in Cash on Hand...
Q3 $399K
Q4 $571K

Change in Accounts Receivable
Q3 $989K
Q4 $1.66 Million

Change in Inventory
Q3 $444K
Q4 $566K

Total Current Assets:
Q3 $1.8 Million
Q4 $3.08 Million

Total Assets
Q3 $3.15 Million
Q4 $4.49 Million
INCREASE $1.34 Million

These all show improvement. On the Liability side....from the increase in sales I think the increase is in line.

Accounts Payable
Q3 $2.59 Million
Q4 $4.25 Million
INCREASE $1.66 Million

Total Current Liabilities
Q3 $4.96 Million
Q4 $6.69 Million
INCREASE $1.73 Million

Q1 2008 should be interesting!







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