Replies to post #110723 on Plastic2Oil Inc (PTOI)

[jimmenknee]

You're welcome ksilva :-)

In re: EPS:

Do the posted numbers mean anything at this stage in the company's development?

Yes as a trend in relation to the stage/milestone attainment. JBII is favorable (stable) overall without getting into the details of what was stated by JBI and what actually transpired to contribute to a negative EPS at this juncture.

I look at companies using the Morningstar model of:
--Financial Health
--Growth
--Profitability

For JBI, the 1st 2 are the most important assuming the last will come along as long as the other 2 are managed well.

I have posted concerns about their financial health, specifically funding to get them through R&D and to get them started operationally. That continues to be an issue as the overall debt increases and cash flow continues to moves in the wrong direction. (most recent post: #msg-63486069 )

Cash Flow itself has been characterized as improving, but it was/is masked by an increase in Pak-it's gross margins this most recent quarter. The perspective I would suggest is to look at Revenues against Selling, General & Administrative (SG&A) costs combined with Research & Development (R&D) costs. The supplemental revenue derived from JBI's subsidiaries is dropping dramatically Q to Q (and I believe there are plenty of hints at their disposal esp. Javaco) while the % of SG&A + R&D to revenue is increasing.

This IMO places a large burden on P2O to rapidly generate revenues to offset while simultaneously attempting to produce additional units and place them in JV sites.

Having said all that I believe these next 2Q's are critical fundamentally; and technically it sets up into short-term directional pivot-point by the end of June.

                   Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 
 Total S&GA + R&D 3677 2752 2508 3174 2602 
 Revenue          3600 3803 3297 1720 2202 
 As a % of Revenue 100.89% 71.05% 73.01% 165.76% 105.09%