Short Term Plays

[Soul Washer]

UTYW 10qsb


Results of Operations

Three-month period ended June 30, 2007 and 2006:

Sales and Cost of Goods Sold

Sales for the three-month period ended June 30, 2007 were $2,621,630, an increase of 31.19% or $623,233, from $1,998,397 for the three-month period ended June 30, 2006. In both our historical product lines and new product lines obtained through acquisitions we have seen a greater diversification in our customer base and geographical areas where the company is now selling its expanded product offerings.

Cost of goods sold during the three-month period ended June 30, 2007 was $2,087,647 resulting in a gross margin of $533,983 or 20.37% of sales, compared to $1,597,679 for the three-month period ended June 30, 2006 resulting in a gross margin of $400,718 or 20.05% of sales.

The increase in gross margin is largely attributed to:

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Increase in sales, resulting in increased component requirements and the company has been able to negotiate better pricing from its outsourced manufacturer due to the higher purchased volume;

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Efficiencies and cost savings have been obtained by centralizing our manufacturing and procurement largely with one outsourced manufacturer;

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Efficiencies and cost savings have been obtained by centralizing our final testing of products in our China facility where the company has also been able to benefit from lower payroll costs.



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