Q3 Earnings Estimate....
Based upon historical revenue and orders growth, I'm going to guess that Q3 will come in with 15-35% revenue growth. I also expect interest expenses to drop by roughly $50K as the note with Ascendiant Capital Group is paid off. To be conservative I'm going to estimate that expenses will grow by a corresponding $50K. However, I will point out that they actually managed to decrease SG&A on a sequential basis this quarter so I might be overly conservative. I'm going to assume that "contractual adjustments" will be flat as a percentage of gross revenue. I'm going to assume a GM that is the same as Q2 at 88.3%. Also, I'm going to assume that their tax rate remains constant at 27%.
As a result of the information above, I'm going to estimate that net income will increase by $145K to $339K.
$1,505,207 * 0.15 * 0.883 * 0.73 = $145,536
$1,505,207 * 0.35 * 0.883 * 0.73 = $339,584.
Using a diluted share count of 28M, I would then estimate Q3 earnings at $0.018/share - $0.025/share.
Thoughts anyone?
Mike
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