outstanding quarter; turnaround story

QTM produces solar water heating systems in China and and sells in Australia and Asia. It also distributes medical equipment. Market cap is under $100 million. Quartely results announced today showed net operating cash flow of $13.4 million on sales of $28.65 million. Over the past year QTM has been negatively affected by withdrawal of Fedral Goverrnment subsidy for solar water heaters (recently replacced by new subsidy of $600 per unit) and legal dispute with Phillips regarding Distribution of medical equipment (settled earlier this year with a new commercial distribution agreement).
In 2009, QTM (which was trading between 30 and 40cents) made a profit of $30 million from a slightly lower rate of sales then this most recent quarter. Sales fell to a low of $9.9 million in the April quarter this year and have been recovering since (June Quarter $14.6 million; September quarter $28.65m). Clearly the settlement of the Phillips case and the restitution of subsidies for solar hot water systems, has put QTM back on the growth path. Based on reported sales revenue and cost of sales, QTM appears to be heading back towards an annual profit around $30 million, which based on current market cap would mean a P/E less then 4. Debt is relatively low around $20 million.