Good questions. Given the valuation, I would not expect perfection. That said,
The largest customer is Nordstrom, but this is by no means a one customer company. Just $1.9 million out of $14.9 million of 1997 sales were to Nordstrom. Second largest is Dillards.
Sorry for the confusion on the real estate. My bad. The company owns both buildings I referred to, free and clear. What I was trying to say was that IF they sold the headquarters, it would be valued as a fully leased (to Penobscot) property. Of course, that would mean they would pay rent on the income statement. Irrelevant. I am not valuing the company on income. I am looking at the balance sheet. What do I own? I own that building.
I will have to go back and check what you are referring to with the boot orders, but orders were up 10-15% in December and the same magnitude in the latest quarter. That certainly does not point to down sales. In this business, the customers forward order, then the company orders from the manufacturers. The orders are not binding, but are usually not cancelled. Nike tends to ebb and flow with these forward orders. And let me tell you, Nike would kill for the forward order growth PSO is showing!
Oh yeah, and the pension plan is overfunded. Not a reason to buy, but just another few cents of margin of safety. |
