Hiram,
Looking at the 10-Q for March 99 quarter:
edgar.sec.gov
I find that CCBL spent $5M investing in Convergence.com:
"Net cash used in investing activities was $9,316,000 for the thirty-nine-week
period ended March 26, 1999, compared to 7,554,000 for the same period of the
prior year. The increase in cash used in investing activities was primarily due
to an investment made by the Company in the stock of Convergence.com. In
December 1998, the Company entered into a strategic alliance with
Convergence.com, a provider of internet-enabling technical services. Under this
arrangement, C-COR has made a $5,000,000 investment in Convergence.com and is
the exclusive reseller of Convergence.com's products and services in North
America. Convergence.com's products and services enable delivery of high-speed,
broadband internet and data services to businesses, residential customers,
schools and other institutions. The investment in Convergence.com is being
carried at cost, as the ownership interest is less than 20% and does not fall
within the guidelines of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" (Statement 115). The
Company's other investing activities derive primarily from purchases of
property, plant and equipment and other investing activities."
Adding $5M to the cash line I get:
March 99 cash: $5.571 compared to March 98 cash: 2.313M
CCBL wasn't losing cash from operations:
"Net cash generated from operating activities was $9,994,000 for the
thirty-nine-week period ended March 26, 1999, compared to $9,755,000 for the
same period of the prior year."
I'm not very concerned about the Accounts Payable line
($11M up from $5.7M) - some analysts believe that
it is good to increase this item as it represents
a "free loan" (see Amazon's balance sheet). As long
as CCBL can pay off their short-term loans...
(Current assets=$51M, Current liabilities=$23M which
suggests that CCBL should be able to.)
CCBL says:
" As of March 26, 1999, increases
in both inventories and associated accounts payables resulted from a higher
level of purchases to support higher production levels anticipated in the fourth
quarter of fiscal year 1999."
I too wish that more companies release the balance
sheet along with the income statement. Not doing so
often leads to investment uncertainty and more volatile
stock prices and lower stock valuations. The balance
sheet is the most helpful whenever a company in buying
out another company as what CCBL is doing.
As a general rule, I've found that stocks drop whenever
the company undergoes a merger because of all of the
uncertainties - and the lack of a consolidated balance
sheet, perhaps due to the time required to produce one,
contributes to that drop. Once the balance sheet
comes out, and the purchase is confirmed to be a good
purchase, the stock will rise.
--Ted the Technician |
