Synopsis of AAPL 3Q Press Conference,
via Motley Fool
>LIQUIDITY. Apple finished the quarter with over $1.2 billion in cash or cash
net of both long and short term debt of $152 million. The sequential decline
in cash balances was due primarily to a net use of $204 million to fund
operations, including the $60 million in severance payments previously
mentioned, the net increases in inventory, and larger accounts receivable
balances related to higher revenues. They are pleased with their asset
management. They were asked about the status of their credit lines and
indicated that they don't see the need to borrow. They ended the quarter
with about $127 million outstanding of their Japanese short-term bank loan.
The rest of it is all long-term debt out several years. They anticipate
repaying half to two-thirds of the short term debt during the fourth
quarter. In terms of liquidity, the company is still in a very strong
liquidity position. They have investments which are doing extremely well.
They also own a lot of real estate. So, they have other sources of liquidity
internally. But, they don't see a problem because even though they used
about $200 million in terms of cash for operations this quarter, as they
continue to move the company closer to break-even, the cash usage for
operations would move toward a break-even situation in the next couple of
quarters so they feel pretty good about their cash position. They need about
$500 million minimum to run the company, so they are well above that level
in terms of availability. They currently don't have any of their receivables
pledged and their receivables are over $1 billion worldwide, so the company
has plenty of borrowing capacity should they need it, but with the current
cash position, they don't have a need to utilize any of those sources.<
fool.yahoo.com:80/fool/97/07/17/calls970717aapl.htm
To much to summarize but required reading. (There will be a pop quiz!) Kudos to Motley Fool.
While not out of the woods, it looks like AAPL has gotten its corporate house in order.
IMHO its upcoming battle is in changing the public perception that the company itself is dying. Reminds from the line from Citizen Kane when Kane is confronted by his father that his newspaper is losing money. To which Kane replied: "Well at that rate, I'll be broke in 60 years."
soup |
