A review of historical revenue and finished goods
While I agree with most people here that Q4 will show a large sequential increase in revenue, I would NOT attribute this to the large increase in finished goods this past quarter (from $82k in Q2 to $785k in Q3). In examining the historical revenue vs. the variation in finished goods, going back every quarter to 2001, I see no evidence of a mathematical correlation between the two for purposes of predicting the following quarter's revenue. So I would caution against using the simplistic formula of doubling the finished goods number and adding that to Q2 revenue to come up with a Q4 estimate. However, what I do see in the historical evidence, is that Q4 revenue is typically strong regardless of whatever changes to the prior accumualtion of finished goods. In one example (FY 2007), we see that finished goods increased to $312K at Q3, and yet Q4 revenue exceeded all possible expectations, and showed a totally outsized relation to the "extra" $624k that those finished goods presumably brought in at retail. In another example (FY 2005), we have similar input but opposite outcome: Where finished goods at Q3 increased to $320K, yet Q4 revenue disappointed by not reflecting the expected addition of $640k at retail. And yet given these random outcomes, Q4 typically seems to be the strongest quarter of the year. This phenomenon may have more to do with seasonality than with finished goods accumulated, as apparently the new fiscal year in Australia starts July (=Q4 for AYSI) and seems to bring with it some unusually strong activity.
Anyway, here is some data if you guys are interested:
FY 2008
Revenue
Q3 $2,541,776
Q2 $4,206,235
Q1 $3,180,339
Finished Goods (2008)
Q3 $785,430
Q2 $82,288
Q1 $103,293
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FY 2007
Revenue
Q4 $3,433,834
Q3 $1,883,689
Q2 $1,753,814
Q1 $1,658,307
Finished Goods (2007)
Q4 $99,717
Q3 $312,163
Q2 $262,730
Q1 $170,731
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FY 2006
Revenue
Q4 $928,358
Q3 $795,696
Q2 $681,569
Q1 $980,460
Finished Goods (2006)
Q4 $195,726
Q3 $262,225
Q2 $177,728
Q1 $300,045
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FY 2005
Revenue
Q4 $1,020,330
Q3 $924,178
Q2 $856,923
Q1 $819,026
Finished Goods (2005)
Q4 $283,936
Q3 $320,842
Q2 $274,384
Q1 $236,162
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FY 2004
Revenue
Q4 $1,129,139
Q3 $532,932
Q2 $660,312
Q1 $664,532
Finished Goods (2004)
Q4 $280,304
Q3 $362,388
Q2 $303,452
Q1 $203,063
--------------------
FY 2003
Revenue
Q4 $619,791
Q3 $348,675
Q2 $545,636
Q1 $357,398
Finished Goods (2003)
Q4 $250,458
Q3 $132,705
Q2 $142,159
Q1 $119,373
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FY 2002
Revenue
Q4 $592,142
Q3 $456,334
Q2 $569,007
Q1 $498,831
Finished Goods (2002)
Q4 $107,521
Q3 $58,469
Q2 $116,877
Q1 $136,416