The reports seems GOOD overall with a 15.3% QoQ. Better than I had expected. But it is not meeting the markets expectation. The same thing that happened to CVSI.
The question here (Most investors will ask) is, would CWEB make the lower range of the $120M revenue outlook given earlier in the year. You need to listen to the CC. I don't know who gave that outlook, if the former CEO or the new one. i would assume was the ex-CEO because i don't think the new would make such a mistake.
This is exactly why it is dangerous to provide such forward looking outlook in a rapidly changing industry. The industry is NOT in the clear legally speaking so you ca provide or promises anything. When all the rules and regs are out on the the table under which all the companies will operate on a leveled field, then you can start to provide a Quarterly outlook. A full year outlook was to bold was my first thought. Now they have some pressure to meet those numbers or retract.
They have made $21.7, $25 = $46.7M Or $73.3M to go
That means CEWEB needs a $33M and a $40.3M Q3 & Q4 respectively. That's an $8M jump for next Q alone. The current regulatory landscape will make it difficult to meet that kind of bump. Plain and simple.
I am taking a look at the report and I will post my findings here. FCF does not look good at all and has something to do with inventories. $10.3M worth of inventories were deducted.
Inventories....................................................................... (10,296)
Why???
This is the kind of tell that I am looking for.
Also
Purchases of property and equipment and intangibles.......(5,611)
This is a problem that CVSI will NEVER have
The FCF does not look good at all. I am going to take a closer look.
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