Q4 2008 Earnings Call Transcript

March 5, 2009 11:00 am ET

Coke (KO) vs. Pepsi (PEP)

Midas, Inc. (MDS)

F1Q08 Earnings Call

May 1, 2008 11:00 am ET

Midas Inc. (MDS)

Q4 2007 Earnings Call

February 28, 2008 11:00 am ET

Sad dollar better than no dollar. A depressed U.S. dollar has detractors such as famed investor Jim Rogers calling for its demise as the world's dominant currency. Still, considering two-thirds of the world's central-bank reserves remain denominated in dollars, and its entrenchment in trade of global commodities such as oil, it seems unlikely to be booted from its perch any time soon.

Many board members award themselves (yes, that's how it's done) gold-plated pay packages even though they regularly play hooky in ways that would get the average worker canned in a heartbeat. More than 520 directors from Equilars database of about 4,000 companies missed 25% or more of their board meetings in the last two years. Most of those meetings last just two days.

Source: Michael Brush, MSN Money, December 16, 2005 "Pay soars in the board room"

I wanted to give you the earnings yields for the companies in the autoretailstocks.com index as of the closing price on Friday.

Source: Yahoo Finance, Zack's, efficient insights llc

The Modigliani-Miller theorem (of Franco Modigliani, Merton Miller) forms the basis for modern thinking on capital structure. The basic theorem states that, in the absence of taxes, bankruptcy costs, and asymmetric information, and in an efficient market, the value of a firm is unaffected by how that firm is financed. It does not matter if the firm's capital is raised by issuing stock or selling debt. It does not matter what the firm's dividend policy is. Therefore, the Modigliani-Miller theorem is also often called the capital structure irrelevance principle.

Merton Miller's analogy to illustrate the principle uses a pizza: cutting a pizza into more or less pieces does not change the underlying amount of pizza.

"In the '70s', people invented hostile takeovers as a way to recapture the approximately 50 percent of the value of American corporations that was being destroyed by its managers with nonoptimal operating policies," asserts Harvard Business School professor Michael Jensen. Jensen, together with the late University of Rochester professor William Meckling, published extensive research purporting to show the positive effect that debt can have on company value. Jensen's main point: A company's operating and investment decisions, and therefore its cash flows, are not independent of its debt-equity ratio.

We are pleased that we opened 6 new shops this year. But unfortunately 21 have closed in the U.S. and Canada during the same period. Our goal remains the same; stabilize shop count this year, and begin to see increases in 2008. To that end, year-to-date, we have signed 8 conversions all of which should open this year. In addition to the conversions, as I said, we have 6 new shops under construction.