Nighthawk Q1 Numbers Impressive
I’m travelling today and already late for my first meeting, so I can’t give you any real feedback on the NIHK quarterly report.
However, it shouldn’t be that complicated. Revenues are way up, and losses are down. One of the biggest expenses now is dividends on preferred- which is being paid in shares- this could represent more supply for the market to wrestle with, but that’s the price of poker.
I’ll craft more thoughts when I have some time to look at this one. For the time being, I still believe owning this stock is like owning an option that doesn’t expire.
Submit and comments or questions, and I’ll get on it next week.
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I think this has potential too but the gross sales increase came at a huge cost in margins. Given that they saw much of this coming (announced in PR’s and 8 & 10-K’s) they have either overreached their own capacity to manage the supply chain, or just over-promised delivery. Look at the drop in margin to 19% and admittedly lower 13% on one piece of business.
It may be “all about the sales” to some, but IMO it’s what you “keep” [i.e. PROFIT] and they look to be potentially farther away from that today, not closer.
They need to fix those costs and dramatically improve margins so they will not need to shell out stock to cover themselves…. losses=dilution. Better to have lower sales at a profit. I’ll bet that there isn’t an investor here who would have been unhappy with a mere 200% increase in sales and something much much closer to B/E.
Editor: No question- as I pointed out, cash is running a bit low, and both revs and margins need improvement from a cash flow point of view. I know the company is very focused on margin improvement through reduced manufacturing costs. Hence, a $.05 stock. Certain components of their business are improving dramatically, but there needs to be additional improvements.
Comment by Steven — 5/16/2008 @ 12:01 pm
Well, will there be so much supply for sale that the price won’t meet our targets soon? Is this now a LONG TERM play only???
Editor: With only a few exceptions, I think all micros are long term plays right now. We just don’t have the volumes to fuel any big moves in the small end of the markets right now. We’ve already corrected to very low levels, so there’s not much reason to sell, but if you’re looking for short term big moves, I don’t see it yet.
Comment by Gary Klahr — 5/16/2008 @ 9:50 am
I agree things are looking very good all around. An observation; Doug didn’t re-affirm his 2008 guidance of 10 million he gave with the year end filing. Do you think that is strategically suspect or just an oversight?
Editor: The $10 million projection was heavily loaded to the back end of the year, and subject to landing a second major customer for the set top boxes. He feels he is pretty close on the second customer, and he also feels the number is attainable- it’s just a question of when. Making it this year will require some luck, but he feels if he doesn’t, he is no more than a quarter or two beyond getting it done. At $10 million, we would really have something.
Comment by JD — 5/16/2008 @ 7:20 am