Earnings Analysis for WOLF – Last 3 Years
Revenue Analysis:
Total and Operating Revenue: WOLF’s operating revenue remained fairly steady, reflecting minimal fluctuations over the last six quarters. It ranged from a high of $235.8 million in Q2 2023 to a low of $192.6 million in Q1 2023.
Gross Profit: Gross profit also showed variability with a high of $64.6 million in Q2 2023, which significantly dropped to $22.5 million by Q1 2024. This indicates potential issues in cost management or pricing strategies.
Cost Management:
Cost of Revenue: The cost of revenue decreased from $180.6 million in Q2 2023 to $178.2 million in Q1 2024, suggesting some improvement in cost control.
Operating Expense: Operating expenses showed consistency, but with noticeable increases during several quarters, such as in Q2 2023 where it reached $123.8 million.
Total Expenses: Total expenses have been closely aligned with revenues but are on a slightly rising trend from $230.5 million in Q1 2023 to $286.8 million by Q1 2024.
Profitability Analysis:
EBITDA: EBITDA values have been consistently negative, indicating operational challenges. The lowest recorded EBITDA was -$51.3 million in Q2 2023.
Operating Income: Operating income has remained negative, ranging from -$37.9 million in Q1 2023 to -$86.1 million in Q4 2023.
Pretax Income: Pretax income has similarly been negative, with each quarter showing substantial losses.
Net Income: Net income also reflected significant losses, the most drastic being -$395.7 million in Q3 2023, which includes a large impact from discontinuous operations.
Cash Flow Indicators:
Reconciled Depreciation: Depreciation values vary slightly between $36.5 million in Q1 2023 and $47 million by Q1 2024 suggesting steady capital expenditure.
Interest Expense: Interest expenses presented an upward trend, especially noticeable in late 2023, indicating growing debt concerns.
Taxation:
Tax Rate for Calculations: The tax rate for calculations was consistent at 0.21 across the periods, except for Q1 2024 which shows an anomaly with 0.4.
Tax Provision: The tax provision was unusually low considering the pretax losses, indicating minimal tax benefits.
Tax Effect of Unusual Items: Significant tax effects frequently appeared as negatives, reflecting adjustments due to non-recurring events.
Shareholder Metrics:
Diluted and Basic EPS: Both diluted and basic EPS consistently showed losses throughout the quarters, with a noteworthy drop to -$3.16 in Q3 2023.
Average Shares: There were negligibly minor changes in average shares, indicating no significant dilutions or repurchases.
Net Income Available to Common Stockholders: Follows the net income trends closely with extensive losses.
Conclusion:
WOLF’s financial performance over the past three years raises several concerns, chiefly related to its profitability, increasing debt levels, and negative cash flows. The company’s ability to manage costs and improve operational efficiency needs urgent reassessment. Strategic steps may be required to curb expenditures or refocus business operations to areas with higher profitability.
Appendices:
Data tables and financial calculations used in this analysis are based on the detailed quarterly figures provided earlier.