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Strategies & Market Trends : Poorman's - CANSLIM Potential Stocks
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To: Carl Worth who wrote (54)6/12/2000 11:21:00 AM
From: ST Trader  Read Replies (1) of 128
 
From News (5-30-00)!!

First quarter results were effected by a strategic repositioning that may affect operations going forward. A shift in operations toward prepaid freight shipments away from the historical freight collect model has had a positive effect on the free cash ratio. Free cash increased by 91.5 percent since year-end. Free cash as a percentage of total cash has improved from 18 percent to 33.2 percent, an improvement of 15.2 percent over the fourth quarter of 1999. This shift has resulted in a reduction of total number of cars shipped for the quarter. The reduction of volume has been principally in North Africa.

Carl, the reason I believe the numbers to be inflated during this quarter is because of the statement in the 10Q (This shift has resulted in a reduction of total number of cars shipped for the quarter.) How could revenues increase when the number of cars shipped decreased??

It seems to me that they are now getting the money before they ship the product rather the when it arrives!! So the question is, did they still include the shipments that were ordered in the 3rd and 4th quarter of 1999 in the 1st quarter of 2000's income statement? This would inflate the 1st quarter due to the fact that all cars shipped in the 1st quarter, and the accounts recievable from prior quarters that were paid during the 1st Q, were included in the 1st quarters numbers!!!

I am far from an expert on this subject, so please feel free to correct me if I am wrong!!! I will probably stay away from purchasing, until next Q's numbers are released!!!

Scott
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