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dburn

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  • Jan 20th, 2011 @ 2:05pm

    Daddario

    Daddario primarily makes guitar strings. There is nothing more profitable in the MI ( Music Instrument) industry than Instrument strings. Once they get past the capitalized costs of automation (that shark was jumped years and years ago) , they not only make strings for their brand but for numerous other brands too. 1000 Employees at 150 Million in sales averages out to $150,000 per employee in sales. We also are assuming all of them are located in the US too.

    With gross profit margins up there with big Pharma and Software companies, the $750,000 dollars that Jim was bitterly complaining about is a tiny drop in the pre-tax profit bucket. I'd be real curious to see what the production employees average pay is, then see what the C-Suite pay is along with dividends to the entire Daddario family.

    This is just one more company who uses connections to the govt to socialize the losses and privatize the profits. By having homeland security and other agencies go after the domain squatters he has pushed the cost of defending his trademark onto the taxpayer. That's par for the course these days.

    Don't let the "poor ol me, small company" line fool people. They have probably announced a price increase that more than covers actual costs and "reserves which increases the tax deductions. They'll shift the deductible into another category like the catch all line called R&D as the prices stay elevated.

    The problem with private companies is, one never sees how much BS is going on. $750,000 is exactly 1/2 of 1% of gross sales. You can bet prices went up to cover it and a whole lot more.