JojoK, I think we need to take Brian at his word that "While our financial performance fluctuated this particular quarter due to this OEM business model, the progress for the first nine months of this year is a major turnaround over last year."
The company doesn't provide a breakdown of their sales channels; but we know that the new OEM products from Molnlycke weren't even on the market for most of the quarter they just reported, so I think it is short-sighted to sell just based on last quarter's results. Molnlycke just "debuted" the product at the WOCN conference during the last week of the quarter (June) and that was only 8 months after the agreement with Molnlycke was signed. The product roll-out was actually surprisingly quick IMO, considering the work of getting the products re-branded, re-labeled, and re-approved for sale and I believe reflects Molnlycke's commitment to the product; but investors have to have reasonable expectations for the length of the sales cycle for these products, revenues streams aren't going to go straight-up, but hopefully show consistent steady gains over the long-term.....starting from ZERO!
Look at the revenue and earnings trend in the I-Box above, if this last quarter lacked the OEM orders and represents mostly distribution revenues, I think we are still definitely heading the right direction if you look back to the $500k total revenue quarters of Q1 & Q2 2013. If Q3 represents a new baseline of sorts for the wholesale distribution business, we are definitely going the right way still, but we're going to have to wait another quarter or two to see if that's the reality.
That's also not to mention the two new hires in the company's sales department, the introduction of new product shown on their website to be "pending FDA approval", and most interesting to me is the new revenues in the Specialized Medical Device coatings business, which we have been given no explanation for as of yet other than a company website update highlighting their capabilities in that department.
In conclusion, the company doesn't provide much information to develop strong specific short-term forecasts; but I believe the long term revenue and earnings trends still reflect triple digit growth and will continue to as Molnlycke puts their own products out there in front of distributors.....and the ongoing negotiations Brian refers to in recent PRs come to bear.
"Our houses are such unwieldy property that we are often imprisoned rather than housed in them." - Henry David Thoreau, Walden: Economy, 1854
