The notes on the receivables on the recent 10Q are:
The Company's cash position at May 31, 2000 increased $17,777 from the November 30, 1999 level. Operating activities used $20,287, primarily from increases in inventory of $56,507 and decreases in accounts payable of $4,009, partially offset by a decrease of $35,076 in accounts receivable. Accounts receivable days on hand decreased to 50 days at May 31, 2000 from 51 days at May 31, 1999. Inventory days on hand increased from 30 days last year to 54 days this year. The increase in inventory value and days on hand was primarily in the Wireless Group. Investing activities provided $5,484, primarily from the sale of investment securities, partially offset by the purchase of property, plant and equipment. Financing activities provided $32,611, primarily from the proceeds of the follow-on offering offset by repayments on the line of credit agreement. In addition, financing activities were further offset by the payment of a dividend of $859 to Toshiba Corporation, a 5% shareholder of Audiovox Communications Corp..
And I still don't see the switching around you alluded to.
The note referring to the sale of the stock is:
In February 2000, the Company completed a follow on offering of 3,565,000 Class A common shares at a price to the public of $45.00 per share. Of the 3,565,000 shares sold, the Company offered 2,300,000 shares and 1,265,000 shares were offered by selling shareholders. Audiovox received approximately $96,623 after deducting expenses. The Company used these net proceeds to repay a portion of amounts outstanding under their revolving credit facility, any portion of which can be reborrowed at any time.
Now selling stock and using the proceeds to pay down debt is not an irresponsible move. Especially when you sell the stock at the price they did. If they now buy back that same stock for its current market price, it has all the earmarks of a sound move. Please see this news: biz.yahoo.com
The press releases you refer to are:
biz.yahoo.com
www2.marketwatch.com
thestreet.com
Marking down inventory that is less profitable and has become obsolete because you are concentrating on a higher volume product line is not necessarily evil intent.
The same 10Q you referred me to as well as the press releases show that sales have increased $269,455,000 to $761,790,000....when you stack that against the 96 million they received from the stock offering, it is apparent at least to me, that they are not primarily in the business of selling stock.
By rebutting some of your arguments, please don't feel that I am saying your hunches about the investment risk of this company are anything but right on, your intuition here may very well be proven to be prophetic. All I'm saying is that I don't find the support for the arguments you make solely in the submitted financials. |
