ALWAYS,
You may be right for the sales being $400,000 less in 9 months but if you balance all the income/cost/expense, DBYC pretty much break even for the 9 months. Overall 2011 has been the same in my opinion or even better if you subtract one time 160k sales contract in Q1 of 2010.
-$437,988 less sales in 2011 (cuz of 1- 160k contract for 2010 Q1)
+$117,790 (less expense than 2010)
+$70,000 (less travel expense than 2010)
+$26,000 (less cost for supplies than 2010)
+$18,529 (less adminstrative cost than 2010)
+$45,758 (less extinguishment debt and interest expense than 2010)
= add the +'s and u will save $280K approx. to $437k in sales decrease and that leaves u with $157k in 2010 surplus but minus that with $160k contract then 2011 u do better by 3k. :)
READ MY BOLD NUMBERS BELOW to knw where I got my numbers
Revenue
Total revenue was $854,142 for the nine months ended September 30, 2011 compared to $1,292,140 during the nine months ended September 30, 2010, a decrease of $437,998, or 34%. The decrease in revenue resulted from three principal reasons: first the company, in an effort to capitalize on growing demand for software to support inspections related to the Fair Housing Act, devoted material executive and staff time to develop and test the internally developed software, which had a short term consequence of decreasing first quarter revenue activity. Secondly, the first quarter of the prior year enjoyed the revenue timing from the conclusion of a certain large project that directly contributed approximately $160,000 in the first quarter of the 2010 period. It is the Company's belief that the first quarter revenue interruption from the Fair Housing software development will be more than offset by future commercial activity derived from the new software. Thirdly contract approval delays, due to various prospective client budget concerns and/or economic constraints various prospective clients approval times have been protracted as both public and private sectors are scrutinizing and protracting the approval process as a result of the Nation’s economic circumstances. As the Company continues to be awarded contracts and the ADA laws are absolute the Company views the above referenced circumstances as short term in nature and not reflective of a permanent change in the business environment.
Cost of Revenue
Cost of revenue for the nine months ended September 30, 2011 decreased by $117,790, or 23%, to $400,010 for the nine months ended September 30, 2011 from $517,800 for the nine months ended September 30, 2010. The components of cost of revenue are compensation costs of inspection staff and travel expense. Compensation costs of inspection staff decreased by approximately $70,000 and travel expense decreased by approximately $22,000 from 2010 as a result of reduced travel and associated expenses related to reduced inspection activity in the first quarter of 2011 and the result of the capitalization of compensation related to the development of software designed for Fair Housing inspections. Equipment and supplies consumed decreased by approximately $26,000 from 2010 to 2011.
Selling Expenses
Selling expenses for the nine months ended September 30, 2011 increased by $1,177 to $81,225 for the nine months ended September 30, 2011 from $80,048 for the nine months ended September 30, 2010. The primary increase in selling expenses consisted of increased costs related to new marketing and promotional activity in 2011.
General and Administrative Expenses
Total general and administrative expenses for the nine months ended September 30, 2011 decreased by $18,529 or 3%, to $559,703 for the nine months ended September 30, 2011 from $578,232 for the nine months ended September 30, 2010. The primary components of our general and administrative expenses are compensation costs not associated with cost of revenues or the sales process, and include insurance, rent and depreciation. The decrease in general and administrative expenses resulted primarily from various increases and decreases in these components.
We do not expect general and administrative expenses to increase substantially in the coming 12 months. We intend to focus on operating efficiencies, increasing revenues, and attaining profitability during this period. As our core support infrastructure is now in place we expect that due to increases in revenue, we will enjoy significant high margin profitability, particularly as our staff expansions will be in revenue generation and not support staff (for example should the Company need to significantly expand the inspection staff, there will not be a need to expand administrative support nor management for that staffing, accordingly higher margins will be obtained).
Interest Expense and Loss on Extinguishment of Debt (Other income/expense)
Other income/expense for the nine months ended September 30, 2011 was a net expense of $35,972 as compared to $81,730 for the nine months ended September 30, 2010. The decrease of $45,758 is related to the reduction of interest expense of $11,712 and a decrease in loss on extinguishment of debt of $34,046.
