RBC Life Sciences, Inc. (RBCL)

[nelson1234]

Mike, these earnings may be built into the stock price at .40+, but I also think RBCL faces headwinds:

Posted by: nelson1234 Date: Wednesday, February 25, 2009 9:47:13 AM
In reply to: None Post # of 112209

rbcl - poor earnings report imo (I think they made less than a penney on $7+ million in sales). They were able to turn their backlog into decent sales, but couldn't convert to earnings. I also don't like their near term prospects, althought they could always have a better qtr than this one.

Two-thirds of their sales (per the last 10q) are to what they call the former soviet union. I imagine much is to Russia. RBCL's backlog hit the roof while the ruble-dollar xchange rates were very low. For instance, in late August it was around 24 rubles/dollar. On 12/31 it was at 30 rubles/dollar, and now its at 36 rubles/dollar. So, either the price of their goods has gone up by 50% in Russian Currency, or their margins are going down dramatically going forward. Plus, I think the Russian economy is very messy right now (join the club).

Here's a dollar/ruble chart: http://www.exchange-rates.org/history/RUB/USD/T

Addendum: in fact, the ruble had been at the 23.xx/dollar the whole time RBCL built up that huge backlog, so I think its fair to say the dollars value has increased over fifty percent since then. Here's a more complete table: http://www.bankofcanada.ca/cgi-bin/famecgi_fdps

RBCL does have a pretty strong balance sheet so don't think there is too much downside at .43, but I still don't like their prospects as much as I used to.

here's the earnings report: http://biz.yahoo.com/prnews/090225/da74953.html?.v=1

best.