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McKhenry

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15/06/19

11:30

Post #: 39073166
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Originally posted by retiredyoung: ↑

Millions in expenses have been cut or moved to 'corporate', so breaking even is no longer the same as what was implied last year. In my opinion stating that buddy ohm and managed services businesses will break even is the CEO trying to save face. In my opinion it would have been many years before the old business was able to 'beak even', even with significant cost cutting.

Ohm is now a very small contributor to the revenue of the business (probably approximately 1%) and that percentage is going to stay low.

In my opinion Lifx will need to be very successful for BUD to become profitable. Going forward, BUD probably has approximately $3m in interest payments, something like $3m in corporate expenses, $0.5m D&A and probably a few million in share based payments. Meaning Lifx will need EBITDA of more than $8m for the group to be profitable for a whole year.

Remember if BUD is profitable in the Dec qtr and only the Dec qtr the following statement is achieved, they are not saying that they will be profitable for the whole of CY19 and they are not stating that they will be profitable in Mar qtr 2020 or June qtr 2020 etc:

1) Achieve Buddy Group (ie: Buddy Ohm, Buddy Cloud, LIFX) profitability "by" end of CY19

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That is how I read it too, old BUD is probably still a $1.8m per quarter burn post cost cutting.

It will be the tariffs and cost cutting on LifX that will save the day, lets hope they don't wreck the product taking the 15-20% out now it is BUD's life support system.

Last edited by McKhenry: chaNGE 15/06/19

BUD Price at posting: 5.1¢ Sentiment: Hold Disclosure: Held
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