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Technology Stocks : The Learning Company (TLC) -- Ignore unavailable to you. Want to Upgrade?

To: Irwin Ma who wrote (5338)	8/19/1998 11:02:00 AM
From: Trader Dave	Read Replies (2) \| Respond to of 6318

Ok here's a quick summary of the poop: TLC made a mistake in it's 10Q. pacific crest equities was out with a comment. I do not have time to explain the accounting complexities on this one - sorry. TLC has factoring facilities to generate cash flow from it's accounts receivable. by using factors it suppresses the size of the a/r balance. TLC added a european factoring facility of $25 million to it's $75 million existing factoring facility. In the 10q, tlc stated each of these facilities was fully utilized. It should have stated each of these facilities was fully utilizable. Oops! If fully utilized it would mean gross a/r dso's were quite high. However, based on how much they were utilized, gross a/r were 105 days, not out of line given the seasonality. factoring provides the free cash flow to support the back to school and christmas season. with brod adding a big cash position, factoring won't be as necessary and with the fall season a/r should drop somewhat. Given the flames of the shorts and the spookiness of the market relative to cendant, the reaction wasn't a surprise. I had to wait to post this until i finished adding to my position. Now we'll see how the market reacts, I'll be fascinated to see PRichards observations. Is there a CFA out there that can verify my interpretation? TD