Caught me! As soon as I stop laughing - I'll tell you a little.
Started buying this last week - followed a long time - owned them in the past. Local company - Greenwich, CT. Great mgt - eps out in a couple days. Real cheap. Here is the bear story -
09/21 3:25P (DJ) +DJ Blyth Indus Down 8%; Co. Cites Negative Research Report
NEW YORK (Dow Jones)--Allegations of inventory control problems, declining gross margins and poor cash flow snuffed out any fire behind shares of candle and home-fragrance maker Blyth Industries Inc. (BTH), sending them down as much as 14.6% Tuesday.
The allegations were made in a report issued by the Center for Financial Research and Analysis, a Rockville, Md., subscription service that sells studies of companies' accounting practices to investment firms, according to a Blyth spokeswoman.
The spokeswoman said elements of the research firm's less than flattering portrait of the Greenwich, Conn., company were incorrect or highlighted information the investment community already knew.
"Inventory and accounts receivable are in good shape relative to our sales growth," said the spokeswoman, who claimed some of the numbers used in the report "just aren't accurate."
The spokeswoman said the research report seems to be culled from the company's filings with the Securities and Exchange Commission. She said she wasn't aware of any conversation between Blyth and analysts at the the Center for Financial Research.
Howard Schilit, president of the watchdog research firm, wasn't immediately available to comment.
After dropping as low as 26 3/4, Blyth shares recently traded at 28 9/16, down 2 3/4, or 8.8%, on volume of 1.3 million. Average daily turnover is 163,600. In an effort to clarify information given in the research report by the Center For Financial Research and Analysis, a Blyth Industries spokeswoman said the company's fiscal second quarter accounts receivable rose 22% from a year ago, excluding the effect of acquisitions.
In the same period, both inventory levels and sales, excluding the effect of acquisitions, rose 19%. Total second quarter sales rose to $229.7 million from $181 million a year ago.
According to the spokeswoman, cash flow from operating activities is estimated to be about $100 million in fiscal 2000, with about $55 million in capital expenditures projected during that period.
The spokeswoman didn't deny the report's finding that Blyth will post declining margins, but she said the claim was "old news."
Blyth disclosed expectations of declining gross margins when it acquired Swedish candle maker Liljeholmens Stearinfabriks AB in May, the spokeswoman said.
Historically, Liljeholmens has had lower margins than Blyth because most of the Swedish company's sales are generated from the sale of mass market, unscented candles. Blyth plans to introduce its higher margin, scented candles to the new unit's European customers in fiscal 2001, said the spokeswoman. She said test marketing of the scented products is beginning in Germany.
Blyth expects that some of the negative impact on operating margins stemming from the acquisition will be offset by operating gains elsewhere.
For the second quarter ended July 31, gross margins fell to 57.9% from 57.3% a year ago. Fiscal 2000 margins are expected to drop to about 56.7% to 56.6%, the spokeswoman said. |
