Management Analysis

Three years ago, this company's shareholders agreed that shaky finances and a lack of corporate vision were hampering our ability to deliver the products that make us great to the customers who need them. In that time we've achieved outstanding growth in a tepid economic climate, and we've delivered the value we promised. We'd like to discuss a few of the factors that made this possible: The management restructuring, our new marketing department and why our dividends have been increasing so rapidly.

Our Management and Policy

When our management team took over Penismightier there were significant problems. We had an enormous amount of liability and our sales were stagnant. The Board of Directors brought us on board to change how this company does business. Our policy was to increase value to shareholders by reducing non-value added activities, and to increase product innovation. Our marketing projections at the time supported us with optimistic sales forecasts.

However, these sales figures turned out to be inaccurate and seriously endangered the health of our company. We lost half our sales and incurred a large unexpected liability of $810,000 because of the price we set in response to their projections. It is safe to say that some of the people who made those decisions are no longer with us.

Our Brilliant Recovery

In response to this disastrous miscalculation, we instituted new policies in our marketing decisions, and in our entire integrated strategy. These policies have paid off well, by strengthening our market presence in a way that distributes our consistently exceptional products to the widest possible market. We dropped our prices by $150 dollars per unit and made a $60,000 investment developing our brand and sharing our vision with the industry. By the end of the following year we were well on our way to becoming a very profitable enterprise.

Financial Leveraging

Still, the ramifications of the decisions made using miscalculated sales projections haunted us. Because of the liabilities that this mistake incurred, our interest rate increased to 11% and our debt payments totaling $475,000 were destroying our bottom line. Our team decided to issue $1,000,000 in stock to generate cash in order to get our finances in order. This issuance of stock brought in enough money to drop our debt to equity ratio from 3.48 to 2.2. Consequently, our banker lowered our interest rate back to 9%. With our finances in order we felt safe to successfully pursue our course of cost reduction and product innovation. As our profits continued to grow we realized that these profits were not getting to you, our shareholders. It came to our attention that by issuing the new stock we had diluted the value of our stock. With the higher profits we realized due to our lower interest rate and substantial debt reductions, we decided to take out a loan of $2,150,000 and buy back the stock we had issued, which dramatically increased the value of your stock.

Market Position

Our products are positioned as best of breed solutions, and we deliver. Year after year our products have exceeded projections, and each year we set the bar for high-end technology solutions. Over the past few years, the demand for our product has skyrocketed. This phenomenal growth occurred even in the face of gradually increasing prices and a freeze in advertising expenditures. However, our marketing department's staffing criteria has allowed us to cull outstanding personnel, allowing our innovative and cost-effective strategies to create an enormous demand for our product.

Our end goal is to sell only the most innovative solutions, ultimately allowing us to offer the finest products in the industry and a very attractive profit margin to our shareholders. It is our hope that making our products exclusive will move us into an entirely new industry; an industry in which Penismightier will be one of the few suppliers. We anticipate these changes to our business model will result in products so innovative that substitution and imitation will be impossible

Dividends

We know that Penismightier is nothing without our shareholders, and as part of our commitment we have allocated the majority of our profits to go directly to you in the form of dividends; the remainder our profits will go towards improving our processes, and investing in the framework that lets us achieve. This is our way of saying thank you to our dedicated investors. We hope we can continue to serve you well into the future, providing you with high profits, stable growth and innovative products.

Penismightier HOME

Previous Stock Close | Privacy Policy | Terms & Conditions

© Penismightier Entertainment 2002