Web Site
Google Finance
SEC Filing
June 26, 2013
Year end: June 30th
Check list:
1.Major Business.
Slippers, sandals: 70%, Handbag, footcare, travel accessories: 30%.
Brand Names:
Footwear: Dearfoam,
Footcare: Foot Pedals.
Handbag: Baggallini( for older age), Mosey(for younger age).
Travel accessories: KIVA.
Jan-June: 30% of revenue, Junly-Dec: 70% of revenue.
Walmart: 30% of revenue.
2.Balance sheet.
Recent Price: $15.70, Tangible book value:$4.4, Share outstanding: 11.3m, Market Cap:$176m.
Current asset: $80.6m, Current liability: $15.3, Debt: $21.4m, Inventory:$17.3m, Cash: $44.7m.
3.Credit facility.
(1) Line of credit, $5m, could upto $10m from July to December. LIBOR+1.75%. At Mar. 31, 2013, no outstanding.
(2)Term loan: $30m, mature at Mar.1, 2016, $4.3m/year repayment. LIBOR+1.85%. $21.4m outstanding.
4.Financial data by years.
| 3Q13 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006* | 2005 | 2004 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 122 | 156 | 130 | 124 | 114 | 109 | 105 | 33 | 105 | 104 |
| OP Income | 20.8 | 23.4 | 11.7 | 14.7 | 10.5 | 14.9 | 12.1 | (4.1) | 8.6 | (19.2) |
| Net Income | 14.6 | 14.6 | 7.5 | 9.4 | 7.0 | 9.8 | 25 | (4.2) | 8.0 | (19.9) |
| CF-WC | 19.2 | 16.8 | 10.3 | 12.9 | 11.3 | 15.2 | 12.2 | (4.0) | 8.6 | (11.7) |
| CAPX | 0.8 | 1.8 | 0.7 | 1.2 | 1.4 | 1.6 | 0.7 | 0.3 | 0.5 | 0.1 |
| Cash | 44.7 | 41.7 | 24.7 | 44.9 | 39.2 | 26.1 | 18.2 | 1.0 | 3.5 | 1.0 |
| Debt | 21.4 | 26.4 | 30.3 | 1.9 | 1.9 | 2.2 | 2.5 | 3.0 | 3.5 | 7.1 |
| Dividend | 2.8 | 3.3 | 3.1 | 1.6 | 2.7 | 0 | 0 | 0 | 0 | 0 |
*2006 contains only Jan. to June result. Before that, fiscal year ends at Dec.31.
5.Insider holding, options, Insider trading info, share buy back.
Gordon Zacks: Former CEO for many many years, 306k, 2.7%
Greg Tunney: less than 1%
6.Management compensation.
Greg Tunney CEO around 1.5m
Top five around $3.5m/year.
7.Employee numbers. Revenue/Employee. Compensation/Employee.
138 employees. Previously it had over 3000 employees at early 2000 years.
8.Industry comparison.
The company claim to be 30% of US market for comfort slippers.
ISOTonner slippers: half of the DFZ's sales.
9.Auditor
KPMG
10.Major events.
(1) 2004, Gordon Zacks stepped down because of terrible operation result for several years.
(2) Jan. 2011, Acquired Foot Pedals for $14m cash.
(4) Mar. 2011, Acquired Baggallini for $34.6m cash.
(4) Mar. 2013, Acquired Mosey for $1.2m cash.
(5) Jan. 2013, Acquired KIVA for $0.5m cash.
11.Comments.
(1)Since Greg Tunney join the company at 2006. It has been doing very good. Including the 2 acquisitions in 2011 turns out pretty good. He seems quite talented on integrate and acquiring business. The past 6 years is the most profitable years for DFZ's history. He indicated that he is stilling looking to acquire an $20-$30m business with patient. He is target to make a $200-$250m sales in next 2 to 3 years.
(2) For the past 5 years, average FCF-WC is about $12m. That gives a base price $12/11.3*15=$15.93.
(3) Quality wise, since both revenue and income is growing pretty well. Would give it a 9 in quality score.
(4) Although Greg Tunney as the CEO is very satisfying. He also auto sell his stock after exercise options. That is kind of disappointing. Don't know why.
(5) The current price still a little high as not provided enough margin.
Update:
May 2014
The company was acquired by Mill Road at $19/share.
