Revenue had been rising nicely, until recently. The company fiscal year ends on June 30. For 2003, revenue was $40.4 million and this rose to $80.8 million in 2004 and $97.2 million in 2005. According to Yahoo!Finance, the company had positive operating income in each of these years. However, each of the four calendar quarters of 2005 had revenue between $23.5 million and $24 million. Things had died down a lot. Operating income got spotty with the quarter ending in December 2005 at $2.2 million.

On April 21, the company had to restate some of its earnings for fiscal 2004 and 2005. Net income came down some, but cash used in operating activities was not materially impacted. It did make the markets nervous and the stock dropped about 20%, but regained much of this over the next trading week.

But yesterday, another shoe dropped. The company announced its fiscal Q3 numbers for the period ending March 31. Revenue fell from $23.9 million in the same quarter last year to $22.7 million. And income from operations dropped more than 90% from nearly $1.2 million to $109,000. This continued a trend. For the nine months ending March 31, revenue was basically flat at $70.2 million for the current period compared to $69.2 million a year ago. Operating income for the nine months fell sharply from $5.5 million last year to $2.8 million.

Yak is not sitting on a lot of cash, only $12.9 million. In addition, the stock has dropped from a 52-week high of $6.40 to $3.03 and hit $2.35 in intraday trading yesterday, a 52-week low.

Yak is promoting the fact that it is getting into VoiP, along with every other telco and cable company in the universe. It will take a lot more than that to move these shares back up.

YAKC 1-yr chart:

Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at douglasamcintyre@gmail.com.

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