No, stock barber. You need to read the last 10-K, the last quarterly report, and this quarterly report, and read especially the notes that follow the data.
In addition to full time employees, DRUS has had a number of other people who have received fees (very large fees), most notably advisory fees in conjunction with the assorted debt vehicles. These debt vehicles and the dilution/possible dilution they would entail, as we all know, caused the stock price to tank from .25 to under half a cent. It was a requirement of certain debt agreements that there be enough shares on hand to convert the debt if all the notes were defaulted on. That's why, with the additional convertibles that we all know about, there had to be a share increase to 1.5B shares, which in turn was the specific negative catalyst which tanked the stock to historic lows.
Without recreating the entire last 10-K, in brief: as to the 2017 line for selling, general, and administrative expenses, that's the line where many of these hefty advisory fees (including approx. $800,000+ for just one of the fees, and if I remember right another $1.2M) were itemized in the 2017 expenses. So that line isn't just representing full time salaries - far from it. In 2017, salary wise that line was mostly cash allocated to paying the people involved with the assorted nasty debt vehicles. They got some obscene fees, no doubt, but that's why the number was so huge in 2017, and why there was such a dismal discrepancy between gross income and selling/genera/admin. Two takeaways: 1) DRUS got involved with some horrible debt vehicles with very unfavorable terms and fees, and 2) Howco isn't the financial disaster it would appear to be from the 2017 10-K. Its margins are pretty small - around 6% average I think I read somewhere, but there's room for improvement, and positively scaling sales does not mean expenses would rise at the same rate - they may need one more employee if their sales double, but maybe not. They have a positive gross profit margin--that's indisputable, but it's been offset by ungodly expenses related to financing.
I haven't had time to read all the notes to the new 10-Q, but I can confidently say that the $3.6 improvement in selling, general, and admin expenses is mostly the result of DRUS paying the aforementioned fees and avoiding financing that entailed more of such gargantuan advisory fees. I read both of the older SEC docs I mentioned in their entirety and don't want to do so again--I didn't know there was going to be a test or I would have taken notes--but I'm correct in my explanation, though my details may be a bit fuzzy dollar wise since I don't have the SEC docs in front of me at this moment.
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