Q3 estimates. I listened to the cc call again rather than read the transcript (which often has errors). In the cc call Arthur says 95% of the backlog will ship (vs the 55% the transcript said). It's clear. Raj then says "greater than 90%"---similar to 10Q.
Backlog is $7.7M. 95% of it is $7.3M.
In 2Q they did 15% of their business in non-telecom = $1.32M. The lowest quarter total they even had for bookings was 2Q at $2.4M. I will estimate they get $1.0M in bookings from misc, international demo units, marine, military, etc.
Q3 = $8.3M. I think that's a fair number. Any thoughts?
Q2 margins were 32%. I'd think that would be similar. Sales may be $1M less, but the plant can run more efficiently.
Q2 Expenses + interest = $2.39M. I'd say $2.4M for Q3.
No taxes.
$8.3M x 0.32 - 2.40 = $256K = 2.5 cents/share.
Analysts have them at $8.5M and 3 cents/share.
AS SUCH, if they ship most of the backlog and scrape together just $1.0M in additional orders, Q3 isn't some kind of horrible disaster. It's just a set back.
The key is can they do this plus:
1. Get orders already on the books come the end of Q3 that excite investors.
2. Debut the new software application in Sept. And debut the NG engine internationally (they said 1-2 months which is still before Q3 earnings report).
3. Get any international deal done at all. Arthur said they were very close on several deals and the software application is the key element. Can the close a deal after it debuts?
Yes, there are a lot of "ifs" here. However, the stock is now trading for disaster and I don't think it's the case. The stock could easily be in the $4s on any good news.
Long term.....the #1 important thing is can they start doing $9+M/qtr in U.S. Tier 1 orders in 2020? We won't know that till the next round of orders come out in late Sept, Oct or Nov like last year. With a base like that, then everything they generate---Tier 2, international, NG residential, military, etc is the true reward for shareholders.
You figure in 3 quarters they will have done $7.7M (Q1), $8.4M (Q2) and probably $7.3M in Q3 from U.S. telecom. It still sounds like they are bullish here. Can those go to $9M or more next year? $10M? Can they get Verizon back?
