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Conolog Corp. Reports Operating Results (10-Q)

June 14, 2012 | About:
10qk

10qk

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Conolog Corp. (CNLG) filed Quarterly Report for the period ended 2012-04-30.

Conolog Corp. has a market cap of $2 million; its shares were traded at around $0.07 .

Highlight of Business Operations:

Sales for the quarter ended April 30, 2012 were lower compared to the prior year three month period, the sales revenue decreased $261,852 or 52% to $240,115, compared to total revenues of $501,967. The decrease is a result of having a large order during last years quarter without a comparable one this year. Military sales increased $29,844, due to a large order from the Coast Guard.

The Company recorded a net loss of $405,143 for the quarter ended April 30, 2012, as compared to a net loss of $349,612 for the quarter ended April 30, 2011. The increase in net loss of $55,531 can mainly be attributed to reduced sales during the current period which were offset by higher operating expenses during the prior quarter. For the quarter ended April 30, 2012, gross profit decreased $151,172, general and administrative costs were $82,671 lower than the prior period, while research and development was up versus the prior period by $13,390, and selling expense was $32,721 higher. As a result of the foregoing, the Company reported a net loss applicable to common shares of ($0.02) basic and diluted loss per share compared to ($0.03) basic and diluted loss per share for the quarter ended April 30, 2011.

Sales for the nine month period ended April 30, 2012 were significantly lower as compared to the prior year nine month period. The sales revenue decreased $685,364 or 58% to $494,344, compared to total revenue of $1,179,708. During the same nine month period in 2011, the Company was completing two significant contract orders for the delivery of the PDR-2000. Military sales was another area with a significant decline in sales, military sales declined $25,734 mainly due to cut backs in government military spending.

The Company recorded a net loss of $1,396,378 for the nine month period ended April 30, 2012, as compared to a net loss of $3,618,318 for the nine month period ended April 30, 2011. The decrease in net loss of $2,221,940 can mainly be attributed to (a) noncash transactions related to the subscription agreement entered into in August 2009, which resulted in amortization costs related to derivative financial instruments of $1,751,966, and (b) professional fees decreasing $594,634 over the prior year nine month period due to legal fees and accounting fees associated with the restatement of prior filed financial statements. For the nine month period ended April 30, 2012, gross profit decreased $278,431, general and administrative costs were $516,707 lower than the prior period, while research and development was down versus the prior period by $2,643, and selling expense was $116,387 higher. As a result of the foregoing, the Company reported a net loss applicable to common shares of ($0.08) basic and diluted loss per share compared to ($0.39) basic and diluted loss per share for the nine month period ended April 30, 2011.

We have had recurring losses from operations of $1,396,378 for the nine month period ended April 30, 2012, and used cash from operations in the amount of $576,186 and $899,275 for the nine month periods ended April 30, 2012 and 2011, respectively. At April 30, 2012, the Company had cash and cash equivalents of $18,717. At April 30, 2012, the Company had total current assets of $671,006 and total current liabilities of $2,049,423, resulting in a working capital deficit of $1,378,417 compared to a working capital deficit of $765,966 at the fiscal year ended July 31, 2011. The Companys current assets consists of $18,717 in cash and cash equivalents, $91,404 in accounts receivable, $509,304 in inventory and $51,581 in prepaid expenses and other current assets. Accounts receivable decreased from $476,435 at July 31, 2011 to $91,404 at April 30, 2012, resulting from the timing of collections and lower sales during the nine month period ended April 30, 2012. During the nine month period ended April 30, 2012, the Company initiated two private placement offerings.

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