Thanks, Mark.
I had a lengthy conversation yesterday with FEET's new CFO, Eric Tyra. Of course he was not very forthcoming about any projections for the quarter just ending. I asked him if he was comfortable with the analysts projections of earnings, but he wouldn't even respond to that (although some CEOs have no trouble talking in those vague terms).
I asked him about the $100 million offering because I was concerned that FEET might be in some financial difficulty. He assured me that FEET was very strong financially and that it currently had about $25 million in cash. I am not an accountant so I did not understand why the company can claim it has $160 million in working capital but only $25 million in cash. Can you answer this one? Aren't you a CPA? Why is the difference so big?
He said that FEET was going into the market to get capital for expansion purposes while the money was cheap. He did not indicate whether or not there was another acquisition on the horizon; he couched it more in terms of financing the growth of store numbers. He did talk very enthusiastically about FEET's growth, reiterated the financial strength of the company, and said people bought the stock for the right reasons last year and if they are patient, it will pay off.
He also talked about the two mall-based chain stores FEET has acquired. He feels that FEET can offer quite a bit in terms of management, capital, and inventory to really pump up the results from these chains. He claims they were already profitable and that FEET will make them very profitable. He said that FEET went after these chains to gain access to markets where a full-sized FEET store is not in the cards.
I told him that I felt I had been misled by the previous CFO when I called and asked about the amortizing issue and that I wanted to make sure that FEET wasn't going after this money to help resolve another internal problem. He assured me in no uncertain terms that this was not the case. Overall, I had a good feeling about the future of FEET, but am not certain about the coming quarterly results. He did point out that last year's comps will be a tough act to follow since FEET had an outstanding year previously in sales growth.
The sales figures will be released on Monday, August 4th and the earnings probably on Tuesday, August 19th. Hope this summary is useful to any of you who follow this stock.
Walter High |
