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Technology Stocks : The Learning Company (TLC)
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To: Doughboy who wrote (6049)11/9/1998 11:03:00 AM
From: paul richards  Read Replies (3) of 6318
 
tlc a consumer stock??? what else is new...his analysis is superficial, you have to know the business and look beneath the engineered financial veneer tlc reports. in other words, tlc is a accident waiting to happen:

1)tlc burns cash: Q2 tlc had $105m was paid $40m for the tax business, took in +\-$110m from brod but now reports q3 cash of $234m
and most of it is factored a/r $75M plus the $25m . if that isn't enough, tlc has bigger short term borrowings, and an extended line of credit to $150m. what happens to all the cash tlc is supposed to generate? why does the cash balance keep diminishing?

2)tlc hyped its growth of 18%, but using historical proforma of past Q using only mindscape & brod, what about the other 7 companies ? I expect tlc's real growth is something much less than 18% may be only 7-9%.

3)tlc issues large mass orders to retailers with extended terms, it is reflected in hi pre factored a/r's more than 90% of sales.

4)tlc reports eps which is inflated, and q3 is no exception. the brod deal closed aug 31 and shares were issued. to account for the o/s for q3 only 31/92 of the shares issued to buy brod are accounted but tlc captured the revenue of the whole month of aug. it's a technical quirk
but it boosts eps. (if traderdave stmt is true that tlc actually captured july's revenues too the eps figures are even more skewed).

5) tlc actually grows by acquisitions. every acquisition allows for a 1 time skewed q financials. tlc is doomed to keep acquiring to keep up the facade, and therefore can never become profitable.
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