Plastic2Oil Inc (PTOI)

[loanranger]

"Good grief, the company reported18% positive profit margins last quarter."

Good grief indeed. Why would you not mention that that number included waste paper margins? Your gonna need your bifocals to see the the gross margins on fuel alone. It's not 18%. It's not even one whole percent.

The REPORTED gross margin on fuel in Q1, the quarter that was supposed to be Cash Flow Positive, was (Drum Roll Please!) .77% !!!

(The red was just for effect, it was actually a positive .77%.)


At that gross margin percentage (and disregarding the contributions of the waste paper and data recovery businesses), for every $1,000,000 worth of Operating Expenses that the company must overcome in order to break even, it must generate $130,000,000 in Revenues. Last quarter there were over $2.7 million in Operating Expenses and last year that number was over $13.6 million.....unfortunately the gross profit for last year WAS negative, so no amount of revenue would have helped. In fact, when margins are negative, increased revenues act to increase losses. Whoops!

I guess it would be fair to point out that the .77% gross margin in Q1 was a step in the right direction. If they maintained it in Q2, held the line on Operating Expenses and managed to crank out about $350 million or so in fuel revenues, then any margin they picked up in waste paper and data restoration would drop right to the bottom line.

Hot damn!