Pete, Geek, I too would like Michael Burry's comments. The A/R number is the only remaining difficulty with Corel's balance sheet. Even though 90 day "terms" may not be unusual, the A/R compared with the Q2's sales, is. I believe that the only reason the analysts and fund managaers are still "waiting" to give the buy signal is they are looking for an increase in sales and a reduction in A/R.
For the past year, Corel has been shipping product in quanitity to distributors, thereby complying with the "letter of the accounting law" and booking the revenue. In short, Corel has been stretching every way possible to show profitability. Every company would do the same thing (and does do it). When revenue increases on stricter terms, the "street" will see the underlying strength in the product line and pump up the share price.
Good news is that for three straight quarters the increase in revenue and cash indicates a positive trend in this direction. Even better news, Suite 8 is gaining quick acceptance and will create the demand to reverse this trend. I believe that Q3 will show a "marked" improvement in the receivable situation.
One important positive note for Q2's A/R number is that Suite 8 went to manufacture at the beginning of May which means that Corel was able to book any revenue for the quantity they shipped making Suite 8 revenue "current" under 30 days. Depending on the part of Q2 revenue made up of Suite 8 sales, this could be significant.
Up, Up, & Away!
Scott
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