Interesting comments on Filenet in Motley Fool. I'm unable to distinguish how Cornerstone's approach to imaging, scanning etc. is different from Filenet's apart from the different alliances they have. Any of you who have worked with these products able to explain the difference. Is Filenet a direct competitor or are they in a different part of the market? These comments suggest that receivables are building and orders are not coming through for Filenet. Might this be the case for CRNR or not?
GOATS
Since we discussed imaging companies in Heroes, we might as well also discuss FILENET
CORP. (Nasdaq: FILE), which plunged $8 3/4 to $23 today. The company makes document
imaging and workflow products, including software and hardware, and also services those
systems. FileNet said fourth quarter earnings will come in at $0.20 per share, down substantially
from last year's $0.32 and far below estimates of $0.50. One analyst said the company "decided
to build backlog" so as to manage future earnings better. Well, that's a nice position to be in, but
the company's Accounts Receivable days-sales-outstanding (DSO) is enough to give pause.
Explained in the Fool series "Liquid," the DSO measure tells you how quickly a company is being
paid for its credit sales. With a DSO of 100 last quarter, FileNet doesn't look like it's managing its
business very well. If it made a majority of sales overseas where payment terms are different, it
may be understandable. But in this case, it's a good early warning sign of something wrong. |
