They have an issue with revenue recognition which has to be addressed next week.
From what they said on the business update call they had been recognizing revenue at time of order.
Personally I cannot believe that as that is so illegal or at least not Accounting 101 and certainly not GAAP.
That is what they actually said (Andy that is).
I suspect they had been recognizing on delivery not acceptance/invoicing.
Or may be only on receipt of the cash (remember the $5m that was received 5 days late in Q3 - should only affect cash on hand numbers not revenues!
So a new CFO will have to tidy all this up and I suspect there will be a one time charge or similar to make adjustments. The business is still in its first phase of growth so the impact will look large but in reality it is a few projects/deliveries being re-classified.
I think they hit $70m in orders may be $80 as they have a huge and growing backlog/order book.
Revenues (actually invoiced business according to their contracts) could hit $30m (50% more than Q3) but will depend on product mix, which customer use the expensive forklifts and which the run of the mill pallet truck?
If their service costs were under control (no more than Q3) then we will see break a nice gross profit.
Hopefully the focus will be on forward numbers and new business news, as they haven't announce HD this week they must be holding it back or we will be told there will be news when they open their first DC. I am surprised the market hasn't priced it in as there is so much evidence confirming it. What will be big news is if they are using Hydrogen for in-store trucks as suggested in the Q2 call. That in itself is enough of a reason for not releasing news as big competitive advantage cf Lowes/WalMart etc.
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