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Non-Tech : GRIN (Grand Toys International Inc) -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (465)	11/21/1999 11:58:00 PM
From: Frank McVerry	Read Replies (1) \| Respond to of 495

Kevin, <<I still say you are counting the $8M from already-exercised options twice. That money, for the most part, went to pay off the revolving credit line, and as such is NOT cash.>> Nope, no 'smoke and mirrors' involved -they're worth $8M more. Perhaps it will help if you consider these two situations (1) A company is worth $40M and they borrow $8M cash from a bank (2) A company is worth $40M and they receive $8M in cash from option exercises. Calculate the values of the company in each case, before and after the cash comes in - this should reveal to you what is happening. <<Maybe I'm just unlucky, but then again maybe the fact that a business has had a rough few years isn't a good reason to expect a good year after all.>> GRIN's turnaround has been going on now for about 12 months I'd say. 1998 was the bad year (weak CAN$ etc) and now they are coasting towards a record sales and earnings year in 1999 - looks like a turnaround is beginning. <<So what are these "growth prospects"? They get whatever is handed to them and like it. That's their only business, handling the overflow from other distributors.>> Growth prospects? How about these: (1) Diversification into non-toy business - Grand Concepts (non-toy) started in 1997 at 0% of sales. In 1998 it was 9% of sales. In 1999... we'll see (2) Diversification from pure distribution into toy manufacturing and an entry into the US market. ARK was bought on 1/1/99 with an innovative line of high margin foam-based products (see my older posts for some details) These guys are determined to grow. Consider their attempt to take-over 'Great American Fun' Corp in late 1997 - and that was before they had any money. <<Whatever happened to all that Furby business that was supposed to be the salvation of this company, anyway?>> You're just kidding me here, aren't you ! Furby has brought GRIN record first half sales and earnings - not bad for a seasonal toy. Furby continues to defy my best expectations. I originally predicted it would be experiencing discounting by the Summer, yet this weekend I saw it for sale in a local 'deep discount' store at $29.99 (the original rrp). There is even a 'Christmas' Furby at $34.99 (they sprayed it red and stuck on a Santa hat !). FWIW, Frank