I'm perplexed a bit on the pr....
Why did they pre-announce 4th Q numbers? Seriously. Did they:
1. Do it as a warning? They did release them on a Friday. Yes, revenue was a record number and they highlighted it, but $8.0-8.4M isn't very impressive considering there was $2-3M in 3Q that was unfulfilled (due to lack of engines) that should have carried over to 4th Q. It's also not that impressive considering they opened their new facility in early November and had enough backlog (and indications from telecom companies wanting it) to deliver a lot more.
The problem with this idea is that it wasn't like the quarter was a bomb. Just disappointing a bit considering most investors were hoping for a ramp up with the backlog numbers and new facilities.
2. Do it thinking it's an upside surprise? Yes, the Q4 earnings were a record and they are ahead of the worthless Roth analyst #s (who doesn't do squat in adjusting them anymore as I'm sure he is done figuring out this company). Did they hope the pr would boost the stock price up?
The problem with this idea is why do it on a Friday then? Why not wait till Monday when it would get more attention. Also, it's not like $8.0-8.4M is something spectacular. They should have done this in 3Q and built on that in Q4. Besides, the Q4 revenue #s indicates to anyone with half a brain that they are still working through manufacturing issues.
3. A third option (and one I wonder about more and more)....did they do it just to get Q4 numbers out of the way? They realized they were neither very good nor very bad, but wanted 2018 behind them. You figure this is the first time they ever pre-announced earnings.
I say this because they keep talking over and over about international orders, even to the point of discussing them in the 10Q filing last quarter----"We believe completion if initial testing in these emerging markets will result in significant sales in 2019." The new fiscal year has started and perhaps they are expecting these orders to be initiated soon? If so, perhaps they expect a pr on them before 4Q earnings release in early March. Then the pre-announcement of Q4 makes more sense. Why put out good news in the month of February if they are then going to turn around and put up a blah earnings report in early March. The result of doing this is they just killed the momentum of a 2019 story of things ramping up. By pre-announcing Q4, they can ignore the discussion of it for the most part in the cc call and focus on the now & future more.
Is this just hyperbole by me?? Perhaps. But look at the hirings they have done in the last few months. Look at the equipment and manufacturing facilities added. This can't all be to do just $8M per quarter or even $10M. Who we kidding, they could have done this kind of revenue in the old facilities I'm sure. Also, they have spent money on multiple CNC milling machines, a CNC punching machine, CNC painting machine and easily $500K on a laser cutter the size of a small commercial bus. Also, no one knows more about the company than the CEO. He filed that trading plan for 200K shares in early September to potentially sell shares through the end of March. When he filed it the stock was in the low $6s. The stock in November hit $6.50 for a brief moment and he wasn't a seller so it means his price is higher. What makes him think the stock was going to go up enough (with volume) to trigger his sells by the end of March? Certainly not Q3 numbers as he was already aware himself in Sept that those would disappoint. Perhaps he thought Q4 would ramp up faster and he hadn't expected more issues to arise? Even then, this means he expects to ramp up more than it has. You figure the end of March will only have Q4 earnings before it and any pr's on orders/backlog. If he wants to get the stock up, he isn't doing it on Q4 earnings for sure. However, by getting it out of the way, he may be able to do it on new information.
Overall:
I don't fully understand why they released Q4 numbers early. They weren't horrible, nor were they great. They did it on a Friday 6 weeks before the actual report/cc call happens. What was the purpose of it? All I can think of is that they did it just to put 2018 behind them so new pr's build the story (and stock) for 2019.
Does this make any sense to anyone else??
