First, thanks to Hostastock for posting the first few sentences of Paul Knopick's press release regarding the 10Q. For the benefit of anyone not on the mailing list, here's the whole thing, except for the disclaimer wording:
*******************************
SIMI VALLEY, Calif., Feb. 17, 2016 /PRNewswire/ -- Vapor Hub International Inc. (OTC: VHUB) (www.vapor-hub.com) today announced in a 10-Q filing with the Securities and Exchange Commission that its revenues for the six months ended December 31, 2015 totaled $3.257 million, up from $2.499 million in the comparable period in 2014. Gross profit and gross margins also increased in the six month period ended December 31, 2015.
Gross profit was $1.454 million for the first six months of the fiscal year, up from $1.086 million from the comparable period last year. Gross margins increased to 54% in the three months ended December 31, 2015, up from 41% from the comparable prior year period.
The Company reported revenues for the three month period ended December 31, 2015 of $1.295 million compared to $1.127 million in the same period in 2014. Sales increases were the result of increased wholesale distribution of VHUB products and direct distribution to retail stores.
"We are very pleased by our growing success as a public company in a short period of time," said Kyle Winther, VHUB CEO.
*********************************
I'll now add to my earlier commentary. VHUB is breaking even on operations - the first fiscal quarter was a little to the black, and the second quarter was a little to the red. Some of the interest expenses are accounting entries of a one-time nature, but there is a "real" interest expense which is still driving the company towards not (yet) being profitable overall.
At this point, let me copy into this posting an excerpt from P. 34 of the most recent annual 10K report:
"Our operating results and operating cash flows historically have not been subject to seasonal variations and we do not anticipate this changing."
What this means to me is that not only can meaning be found in comparing the same quarter of two fiscal years (e.g. the second quarter of this fiscal year to the second quarter of the prior fiscal year), but also meaning can be found in comparing successive calendar quarters (the second quarter of this fiscal year to the first quarter of this fiscal year, to the last quarter of the prior fiscal year). So let me make that "successive quarter" comparison...
I'd be more bullish if quarterly sales were not showing a flat to downward trend when looking at successive quarters - about $1.3 million in sales in the second quarter of the current fiscal year, about $2 million in sales for the first fiscal quarter of the current fiscal year, and about $1.8 million for the fourth quarter of the prior fiscal year.
This is a company, IMHO, that needs to convert some of its debt to equity, or alternatively to be sold. There won't be a tender offer from a hostile bidder, as management/board owns so much of the stock, but I think the clump of substantial owners will soon be listening, maybe seeking, for a larger company to make VHUB their vaping products subsidiary.
Time will tell...
