Great Report on HOMS. Now I know how a pro picks stocks to short.
The thing that amazed me was that cash went up so much during the quarter (cash and ST investments went from $255 million to $303 million during the quarter). Here is my analysis, from looking at the financials-- From the GAAP statements, total currently payable expenses look like about $100 million (Cost of sales, marketing expense, product development and G&A). Accounts payable and accrued liabilities went up by about $57 million. To me it looks like maybe they stopped paying lots of their bills, on a weighted average basis, around February 10.
Then I look at the huge increase in deferred revenue, which went up by $49 million. Do they bill in January for the full year, which should lead to lower cash collections for the next three quarters, do they sell "lifetime" subscriptions, or is there another explanation?
Lastly, I looked at their distribution obligation liability. At 12/31/00, the number works out--3.9 million shares x ($68.50 - $20.125) = $189 million, the number on the balance sheet. Hovever, the same math at 3/31/01 gives 3.9 million shares x ($68.50 - $23.75) = $175 million, vs $193 million on the balance sheet. Does anyone know what the extra $18 million represents (or am I making a mistake by using the closing price at the end of the quarter instead of an average price)? I didn't see anything from the Move acquisition that should account for the difference.
All in all, lots of questions on the news release. Were any of them answered in the conference call?
Again, Great Report. |
