Hello Tony, I have an interesting observation, here goes:
In last week's conference call, Lou stated that Georgetown Collection was profitable in FY 1996. Thats an interesting comment, because In KNIC's latest 8K filing on Feb.3rd. Georgetown Collection had losses of $2.4M in the first 9 months of 1996 ended Sept. 30th.
This would mean that for Georgetown to have a profitable 1996 as Lou stated, they would have to have made AT LEAST $2.4M in profits in the 4thQ. Now, since the Georgetown acquisition was effective as of Oct. 21th, then KNIC could get just over 2/3 of Georetown's 4Q sales and profits carried into KNIC's consolidated income statement. According to my calculations, that would mean that Georgetown would contribute $1.8M in 4th Q KNIC profits.
Knic's "burn rate" is now runing at $3.2M per quarter, so with 3Q carry-over of the "missed shipment" of $2.7M in sales and $1.2M in gross profits, plus another $3M in bear and doll sales or $1.4M in gross profits, plus $about $4.5M in Jewelry sales or $1.7M in gross profits. If we add gross profits you get $4.3M, minus the $3.2M BURN RATE, you then get profits of $1.1M before taxes. Add $1.1M to the Georgetown contribution mentioned above of $1.8M, you get BEFORE TAX profits of $2.9M. Charges for acquisitions and private placement should not amount to more than 200K in legal, fees, exchange fees, etc.
Since both Krasner and Georgetown Collection have lots of unused operating loss tax credits, KNIC tax % should be 25% vs. 40% (historically).
Now, if we put all this together I get: before tax profits of $2.7M and NET profit of 2.03M or $.12 share and $.23-.25 for FY 1996.
WHY THE STOCK CONTINUES TO TRADE AT THESE IS BEYOND ME!
Shattered but not broken
Juan |
