Just as I wouldn't take that revenues were down in June as a sign that revenues are now going to shrink, I don't take CFN in the same month of June as meaning that they will now operate CFN. Such a short cash flow time frame is too easy to manage to be indicative of much. The June CFN is as much an outlier to me as was the June drop in sales revenue.
Also I'd note that May wasn't CFN on $2.5 mil either... these peak sales in May I'd expect had more to do with the CFN in June than the $2.1 mil sales experienced within that month. They stated that the June sales trend will continue.
They aren't expecting to be CFN for the current quarter as they are refinancing their debt facility as of tomorrow which they claim will be used to add additional capital - enough to increase their finance costs in spite of the reduced interest rate. Maybe equally strong an argument is that if they were expeting to be CFN again they would be shouting it out loud anyway.
Anyway, these CFN considerations would lead me to believe that they need a bit more than $30mil annual sales to break even. I always appreciate your posts
AJX Price at posting:
46.0¢ Sentiment: None Disclosure: Not Held
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