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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: cfimx who wrote (11618)	12/18/2000 5:11:58 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78530

The latest 10-Q has operating earnings (=EBITDA, since no DA) @ (97,056) but the earnings press release shows this 2-step: <<Income from Operations Second quarter income from operations was $87.4 million, before restructuring and special charges, driven by gross margins that were on plan resulting from better sourcing and a larger mix of luxury apparel in the wholesale group. This gain was offset by the strategic decision to take earlier markdowns in the company-owned retail stores that resulted in a reduction in gross margin for the retail segment. Restructuring and Special Charges As previously announced, the Company recorded an after-tax charge of $111.6 million related to the write-down of the assets of a number of stores to fair value, the closures of non-strategic and under-performing retail stores, the write-down associated with the acceleration in the reduction of aged inventory and operating initiatives including consolidation of overseas sourcing operations, as well as employee-related costs. Including the previously announced restructuring and special charges, the Company reported a net loss of $62.8 million, or a loss of $0.65 per diluted share. The charge will be cash flow neutral in fiscal 2001.>> So if you used the 87.4 and yahoo market guide used the SEC (97.056) in the TTM EBITDA (=EBIT), then that might account for the difference. Although Yahoo/Market guide appears to take the numbers right out of the SEC reports without making any adjustments for extraordinary charges and such, it probably is more appropriate not to include those charges. Merrill shows operating earnings for 2000 [not TTM) @ 257, and projects 01 & 02 @ 294.9 & 330.6 respectively (With the 111.6 net restructuring charge specifically excluded). If I take my EV of 2,373 and Merrill's moderately prospective 01 EBIT(DA) 294.9, we get EV/EBIT(DA) OF 8. That's higher than ANF's 6.8, but far better than the 15.9 I originally posted based, apparently, on inclusion of restructuring charges.