(Year end June. 30th.)
Apparel company including brand Soffe, JunkFood etc.
May, 6, 2008
Summery
Have bought some at $4.00 as it is a net net working capital. Now price is around $4.40.
Facts:
1.Total current assets: 190.6m. Total liabilities: 153.2m. (190.6-153.2) = 37.4. Even at current price it is close to the market cap of 37.8m. It is net net working capital.
2. Average earning for the past 4 years is above $1 pre year.
3. Book value: $11.76 pre share.
4. Share outstanding: 8.5m
Analysis:
1. Its active wear segment is doing pretty bad. The restructure cost them 0.91 pre share. I view this as temporary.
2. Found on yahoo finance, one insider officer HUMPHREYS ROBERT bought 32,178 shares early this year at a price over $8.
Updated: June 5, 2008
Q3 2008 Data
Summery
No the price around $3. More info as read more of their financial report of current 4 quarters.
Facts:
1. No deficit for past 8 years. But lost quite a lot of money in year 1999 and 1998.
Analysis
1. During the last several years (2004 and after). Their inventory level remain quite high. Almost half of their annual sales. Now their inventory reaches $136m. For a seasonal reason, it should be down a little bit in the coming quarter.
2. In past three quarters, they borrowed $24m and spent $12.5m in capital expenditure. Another 2.5m is expected in the coming quarter.
3. The restructuring cost is estimated at 0.75 pre share in last year's report. Real is 0.91 pre share.
4. Negative cash flow for past three quarter. Now the total receivable almost equal to total payable. So the 97m debt is solely depending to the $136m inventory. This is a 66% percent. Historically this number is less than 50%. So the next quarter is really important.
Jan. 30, 2009
Q2 2009 Data
Released Q2 2009 data today. Current price around $3.9.
1. Earning 0.07 pre share. Sales up 6.7% from previous year.
2. Inventory still high as $140m. Expect down to $125m at June 2009.
3. Debt still high as $91m. Expect to increase in next quarter and reduce to $88m by June 2009(Reduce $14 compare to Q4 2008).
Inventory and Debt data compare:
Mar. June Sept. Dec.
2007 78(132) 73(125) 84(130) 88(132)
2008 97(136) 102(125) 90(128) 91(140)
2009 88(125)e
From the above table, they debt situation seems getting better than first half of 2008.
Arp. 02, 2009
Recent price around $4.60.
Check list:
1.Price/Book ratio.
Share 8.5m. Book value $9.67.
2.Current ratio. Debt/Current Asset ratio. Inventory level.
Current asset 184m. Current liability 56.6m. Total debt 91m. Inventory 140m.
3.P/E ratio.Deficit check.Revenue/price ratio.
Average earning around $1 for last five years. 2000 earning -2.0 pre share. 2001-2007 no deficit. 2008 deficit -0.06 include around -0.39 restructuring cost.
Revenue 320m at 2008. Revenue/Price around 8:1.
4.Dividend.
Dividend increased from 0.13 to 0.20 at 2007, then suspended after Q1 2008.
5.Cash flow
2004 2005 2006 2007 2008 2009Q1 2009Q2
Operation 13.3 19.4 20.2 20.5 -12.1 16.4 15.6
Investing -53.7 0 -35.6 -38.3 -16.6 -3.6 -4.6
FCF -40.4 19.4 -15.4 -17.8 -28.7 12.8 11
For past five years(2004-2008) total FCF are around -83m while operation income are only 73m. Which means they spend more than double than what they earned.
However, In Q1 and Q2 of 2009, they generate 23m of FCF. Expected Q3 negative cash flow.
6.Grows related.
Revenue grow from 200m to 320m for the past 5 years. Earning grow to $1.73 pre share at 2006 and then declined to -0.06 at 2008. 2009 expected around 0.60 -- 0.80 per share.
7.Management compensation.
year 2008 total compensation for top 5 officers are $2.65m including $0.78m in options.
year 2007 total compensation for top 4 officers are $3.53m including $1.33m in options.
8.Industry comparison.
Polo Ralph Lauren 2008 Revenue $4.9b. 2005 $3.3b. Grows stock. Doing OK. P/E are pretty high. FCF just balanced for the past 4 years.
The Warnaco Group 2009 Revenue $2.0b. Seems doing OK. Latest quarter deficit, don't know the reason. Quite high FCF for the past 4 years.
True Religion Apparel 2008 Revenue $270m. Seems very good grows, balance sheet and cash flow. Only book value is low compare to price.
9.Buy back, insider holding and trading info.
Mar. 2009 one director bought $5000 around $4.00
From end of 2007 to early 2008 quite a lot insider buying around $8.00.
No insider selling so from 2008.
By fiscal year 2008, all current directors and executive officers(13 persons) owns 2.45m shares. It is around 28.8% of total shares.
At Apr. 01, 2009, it bought Gekko Brands at $10m. No goodwill is recorded.
