Pretty much the only thing I pay for online

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Really, really, really want to know what’s going on in the world in a straight forward, no bullshit, analytical way that you won’t come close to hearing in the mainstream media?  Sign up for Stratfor. This is pretty much the only thing I pay for online.  But if you understandably don’t want to pay, there’s a free sign up where you can receive occasional articles.  And if you should decide it’s worth a few bucks, don’t pay the asking price.  They will negotiate!  I know.

GoPro Goes- Public, That Is. A Look at the Final Prospectus

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As pretty much everybody knows, GoPro went public last Wednesday. How refreshing to see a company go public that’s actually making a product and money. GoPro sold 8.9 million shares of its class A common stock at $24 a share and raised a bit less than $200 million. $110 million will go right out the door to repay a line of credit they took out so they could pay a dividend to shareholders back in December of 2012.   Hmmm. Wasn’t January 1, 2013 when taxes on dividends went up?

Existing shareholders sold an additional 8.9 million shares, but the company won’t see the proceeds from that. I should also note that the class A shares will have just one vote per share. Well, that’s not so weird, but what should be noted is that the class B shares will have ten votes per share. What’s the result?

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Quiksilver’s Quarter: The Impact of Market Trends

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In the quarter ended April 30, Quiksilver’s revenue fell 10.4% from $456 to $408 million. The net loss grew from $32.4 to $53.1 million. Discontinued product lines contributed $9 million to revenue in last year’s quarter, but none in this year’s. A year ago, they also owned Mervin and the Hawk brand. I’m a little surprised they didn’t mention how much revenue those brands contributed a year ago.

I’ll spare you a long quote from CEO Andy Mooney on the profit improvement plan (PIP), but basically he says, we’ve done what we said we’d do and we’ll do more. He notes they’ve cut brands and product lines, are rationalizing sponsored athletes and event participation, licensing peripheral products, closing losing stores, reducing headcount, managing expenses down, centralizing merchandising and design, cutting SKUs and factories, and reducing SG&A.
But then they announce that they are pushing back the PIP profit target for a year to the end of fiscal 2017. Why, if they are doing all this good stuff, is that necessary?

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Can the Golden State of Mind Take Hold? PacSun’s First Quarter

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Though PacSun still reported a loss in the quarter ended May 3, the income statement improved compared to the same quarter last year. Sales were up 2.9% from $166.4 to $171.1 million. The increase was the result of comparable store sales being up 3% compared to last year’s quarter. The average sales transaction was up 6%, though the number of transactions was down 3%. Ecommerce sales during the quarter grew 6% compared to last year’s quarter and represented 7% of total sales.

The store count was down to 618 from 638 a year ago. They expect to open four stores during the remainder of the year and close another 10 to 20.

 The gross profit margin rose from 25.1% to 26.1%. The merchandise margin rose 1.4% but increases in other costs left Pacsun with a net gain of 1%.
Selling, general and administrative expenses fell slightly from $52.8 to $52 million. As a percentage of sales they were down from 31.7% to 30.4%.
Higher sales and gross margin combined with unchanged SG&A expense meant that the operating loss fell 33% from $11 to $7.4 million. The net loss was $10.4 million, down from $24.2 million in last year’s quarter.
In between operating income and net income is the dreaded “(Gain) loss on derivative liability” which is related to the 1,000 shares of convertible series B preferred stock issued to Golden Gate Capital as part of a $60 million term loan they got a couple of years ago. In last year’s quarter, it was reported as a loss of $9.3 million. This year’s quarter showed a gain of $1.2 million. That’s a cumulative difference of $10.5 million before the impact on income taxes.
I imagine most of you will be both thrilled and relieved to learn that I am not going to spend time discussing how those numbers are calculated. Feel free to review footnote 10 of the 10Q here if you just can’t stand not to know.

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