Did Alliance MMA overstate its operating margin? A margin of +43% would seem to be very different from -207%.
Alliance MMA was back in the news yesterday for the contents of a seemingly strange August press release relating to its 2017 second quarter financial performance.
As noted in my piece at Forbes — which has full details on the puzzling release and their response attempting to clarify the situation — Alliance released some confusing numbers on their second quarter financial results:
According to CFO John Price, the second quarter “resulted in a 43% operating margin, a 14% increase over the first quarter of this year. The positive trend of these key financial performance metrics…is highly encouraging as we proceed in executing our business plan in a methodical, expeditious manner.”
Yet simple calculations appear to show that Alliance’s operating margin for the quarter was a substantially lower -207%, while gross margin was in fact 43%.
While the distinction between the two margins may seem relatively minor on its face, in the world of public company financials, it’s not, as noted in the Forbes piece. Thus another question appears to be raised in the short legacy of the young regional MMA conglomerate.
Paul writes about MMA analytics and officiating for Bloody Elbow and MMA business for Forbes. Follow him @MMAanalytics.