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No. of Recommendations: 3

I finished looking over the 10K last night (my wife just loves that) and thought I'd share some thoughts. There is a surprising amount of repetition from last year's 10K, as far as patents, Wal-Mart dominance, etc, which I largely captured here:

Two things stood out to me that I hadn't paid closer attention to previously:

1. Profits grew almost exactly in-line with sales, as they came from holding expenses at almost the same level as the previous year. It's great to hold down costs, but I'd really like to see more sales growth. Domestically, BR strips grew less than 10% (after growing 12-13% the previous year), so trends appear to indicate that BR strips are approaching their potential domestically. Growth will depend on Fiber Choice, new products, and international sales (which have been declining slightly the past 2 years).

2. The total option count stands around 1.4M. This nicely nullifies any euphoria over the 1M share buyback, and I also question any buybacks at these levels.

Given these items, I'm still confused as to why the stock has blasted through $20 on the way up to $27 before the recent fall. Respectfully, I don't agree with the assertion that the fall is volatility-based ... I don't recall this stock moving like this over the past 2 years I've held it.

Any thoughts or feedback welcome.


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