Perfectenergy International Ltd (fka PFGY)

[northenlightsk05]

Breakdown Numbers in 10K and Q4
Revenue for Q4 was $11.8 m USD
Gross profit was $1.555 m USD
Gross margin was 13.2%.

The lower gross profit number and gross margin were partially caused by a much higher no-cash item of $0.68 m USD depreciation. The depreciation in Q4 was higher than the combined depreciation in Q1 (0.11 m), Q2 (0.10 m) and Q3 (0.42 m). This took at least 2% off their gross margin.

Higher S G & A cost was partially caused by no-cash item of employee stock option of $0.41 m, which affects earning, but not the cash flow.

The cash flow from operation improved and the balance sheet improved including higher book value of $11.29 m USD as compared with $11.18 m USD in Q3. Cash balance was increased to $3.58 m USD in Q4

Clearly, the company is turning around from cash flow point of view. But earning numbers were affected by no-cash items.

No write-off in Q4 as expected.

The market was over-reacted to the 10K report.