MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Management's discussion and analysis is intended to be read in conjunction with
the Company's unaudited financial statements and the integral notes thereto for
the quarter ended
A. RESULTS OF OPERATIONS
REVENUES: Total revenues from sales decreased to
The Company's revenues have historically fluctuated from quarter to quarter due to timing factors such as product shipments to customers, customer order placement, customer buying trends, and changes in the general economic environment. The procurement process regarding plant and project automation, or project development, which usually surrounds the decision to purchase ESTeem products, can be lengthy. This procurement process may involve bid activities unrelated to the ESTeem products, such as additional systems and subcontract work, as well as capital budget considerations on the part of the customer. Because of the complexity of this procurement process, forecasts with regard to the Company's revenues are difficult to predict.
A percentage breakdown of the Company's market segments of Domestic and Foreign Export sales for the first quarter of 2023 and 2022 are as follows:
2023 2022 Domestic Sales 96% 93% Export Sales 4% 7% BACKLOG:
As of
COST OF SALES:
Cost of sales percentages for the first quarters of 2023 and 2022 were 46% and
44% of respective net sales and are calculated excluding site support expenses
of
9 OPERATING EXPENSES:
Operating expenses for the first quarter of 2023 decreased
March 31, March 31, Increase 2023 2022 (Decrease) General and administrative$ 84,765 $ 84,776 $ (11 ) Research and development 28,663 45,777 (17,114 ) Marketing and sales 148,227 137,159 11,068 Total operating expenses$ 261,655 $ 267,712 $ (6,057 )
General and administrative: For the first quarter of 2023, general and
administrative expenses decreased
Research and development: Research and development expenses decreased
Marketing and sales: During the first quarter of 2023, marketing and sales
expenses increased
INTEREST INCOME:
The Company earned
NET INCOME (LOSS):
The Company had a net loss of (
B. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's current asset to current liabilities ratio at
At
For the three-month period ended
Cash used for investing was
In management's opinion, the Company's cash and cash equivalents and other
working capital at
FORWARD LOOKING STATEMENTS: The above discussion may contain forward looking
statements that involve a number of risks and uncertainties. In addition to the
factors discussed above, among other factors that could cause actual results to
differ materially are the following: competitive factors such as rival wireless
architectures and price pressures; availability of third party component
products at reasonable prices; inventory risks due to shifts in market demand
and/or price erosion of purchased components; change in product mix, and risk
factors that are listed in the Company's reports and registration statements
filed with the
10
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