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Strategies & Market Trends : Stocks that do well in recessionary environments -- Ignore unavailable to you. Want to Upgrade?

To: stockvalinvestor who wrote (4)	10/31/2008 10:02:29 AM
From: bruwin	Respond to of 6

CQB. Had a look at their Annual Results. Growth in revenue in the last 3 years has declined from 27% to 15% to the latest 3.6%. EBITDA Margin also down in that period from 6.5% to 2.7% to 3%. IMO 3% is very low, not much margin for error. But one probably can't expect an attractive Margin in their line of business. Pretax return on Capital in the last 2 years has been negative. There has been a positive return in the last Quarter, but it's still negative in TTM. Their last 2 Annual Bottom Lines were losses, but their last 2 Quarters have shown positive Net Incomes, so things may be turning around. A big negative, IMO, is CQB's large Debt/Equity which is adding a lot of interest expense to the Income Statement which has been severely eroding its profit. That interest expense has come down slightly in the last 2 Quarters (maybe due to drop in rates etc..). However the long term debt amount remains much the same on the Balance Sheet.

To: stockvalinvestor who wrote (4)	3/24/2009 4:00:15 PM
From: bruwin	Respond to of 6

Further to my comments in #5 below, CQB's last Financials showed a MAJOR Negative between CoS and EBITDA on its Quarterly Income Statement. To quote the company ... "In the fourth quarter 2008, the company recorded a $375 million ($374 million after-tax) Fresh Express goodwill impairment charge in the Salads and Healthy Snacks segment which is included in "Equity in (losses) earnings of subsidiaries" on the Condensed Statement of Operations. The goodwill impairment was the result of lower operating performance of the salad business in 2008, along with slower growth expectations, recent negative category volume trends and a decline in market values resulting from the weakness in the general economy as well as the financial markets." CQB's average Quarterly relevant number in its previous 4 Quarters was about $100mil. It's latest 4th. Quarter recorded OVER $482mil. pre-tax !! That important EBITDA Margin fell through the floor. This resulted in the company reporting a Quarterly Bottom Line Loss of -$8.65/share, compared to the previous Quarterly Bottom Line Loss of -$0.13/share. It comes as no surprise that its share price fell over 53% from about $13 in October 2008 to its current $6.15. Just goes to show, IMHO, that the pertinent numbers that appear in an Income Statement, which reflect a company's performance for the period, are far more likely to affect a stock's price than certain Balance Sheet ratios such as Book Value etc..