Elite Pharmaceuticals Inc (ELTP)

[namtae]

Premature expectations

The jury is still out on Elites ability to manage, maintain or build profit margins now that they are becoming more vertically integrated with sales & marketing. This is a significant inflection point for Elite

Revenue wise it's going to be more, profit is going to be a little tricky, because now we have a higher cost for the sales and marketing department, okay? Just to give you a simple example that just came to mind, let's assume you're a pharmacist and you have five products in your pharmacy and one of them is mine, you're selling it. Well, you decide not to sell mine anymore and I want to sell it. If I open a pharmacy for that one product, if you and I sell the same amount of product, my cost is higher, because I only have one in the pharmacy and you got five, okay? So how the profitability is going to work over the next few months? I'm still trying to figure out that out and what other products we can supplemented with, maybe even going as far as asking another company if we can sell their product in order for us to do that. There are other things we can do. But right now, I got to focus on how to make this a success, okay? And then we'll move to the next step.