Joe ~ off the 10Qsb for 1/20The Company's limited liquidity has also had a detrimental effect on the Company's sales efforts during the three and nine months ended November 30, 2003. Furthermore, because the Company has experienced a significant deficit in working capital, the Company announced store closures during the past quarter to reduce its fixed overhead.
During the three and nine months ended November 30, 2003 (the "2003 Periods") net revenues were $1,194,696 and $8,535,553, respectively, compared to net revenues of $5,673,483 and $19,105,524 for the three and nine months ended November 30, 2002 (the "2002 Periods"). This represents a decrease of approximately 78.9% and 55.3% respectively from the 2002 Periods. The Company's limited liquidity has had a detrimental effect on the Company's sales efforts.
Gross margins for the three and nine months ended November 30, 2003 were $154,003 and $1,054,155, respectively, compared to gross margins of $863,012 and $2,895,877 for the three and nine months ended November 30, 2002. Gross margins as a percentage of net revenues were 12.9% and 12.4% for the three and nine months ended November 30, 2003, respectively, compared to 15.2% and 15.2% for three and nine months ended November 30, 2002, respectively.
Basically, it looks like they are consolidating their assets and selling off inventory to become more "liquid". Stretched themselves a little too thin I think. I would keep an eye on them though in case they succeed with their turnaround.
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