You fail to mention that capex is shrinking because GMCR no longer has to build new facilities to manufacture/ store product as they have in the past. Most of capex will go into R&D and improving efficiencies in existing facilities.
Green Mountain Coffee: Don't Count Your Chickens Until They Hatch [View article]
Free cash flow increased significantly this year and is projected to increase again next year. It doesn't matter if it comes from revenue or lower cap ex; it will be used to buy back GMCR stock, a definite positive.
Green Mountain Coffee Roasters (GMCR -6.1%) trades lower after catching some more flak from David Einhorn on CNBC. "Yeah, Keurig is on the way out," was the quote that cut to the bone. Despite all the wild price swings in GMCR during the year, over the last month the stock has traded in a tighter range. [View news story]
The entire CNBC interview was a PR event for Einhorn. The comment about GMCR was a throwaway line that was tied to the fact that CNBC switched brewers at their office. I believe he said the new one was Flavia, one of the worst brands on the market. This reporter is making something out of nothing which is par for the course.
Green Mountain Coffee Roasters Butchered Its Acquisitions [View article]
My point is if GMCR had demand growth in excess of their ability to meet demand for the years you reference, they had to invest more in infrastructure on a percentage basis. There is nothing in your article that gives revenue growth for the three companies. Nothing in the article mentions how much GMCR spent helping Van Houtte and Dietrich produce K-Cups (Keurig had to provide the expertise), lowering their expenses and adding to GMCR's.
"you forgot the point that GMCR is lowering sales expectations but growing inventory. How does that make sense?"
GMCR did not lower sales expectations during the years discussed in the article.
" What does the sale of fixed assets have to do with anything?"
I did not mean sale of fixed assets. "Product/fixed asset" meant product per fixed asset, or in relation to fixed asset.
Shares of Green Mountain Coffee Roasters (GMCR -2.9%) can't shake off that losing feeling as they dip below the $20 mark. This week's headaches for management include the news that single-serve competition is around the corner from Kroger and Safeway, while the overriding theme on GMCR is that the company hasn't solved the issue of what it will do to counter the patent expirations (I, II) that are around the corner. [View news story]
Don't mention the fact that GMCR has a pending lawsuit defending their patent on K-Cups, or that none of the supermarket K-Cups have been available to test market. Most consumers will not change their coffee brands to save a few dollars a week, certainly not if the store brand is inferior quality. You are assuming GMCR has to solve an issue that may not exist.
Green Mountain Coffee Roasters Butchered Its Acquisitions [View article]
None of the companies GMCR took over were growing capex anywhere near the rate of GMCR, which means your entire analysis of those figures is meaningless. If the company is building infrastructure it will sell less product/fixed assets. Explain why GMCR should have a higher turnover of inventory if it has historically been over producing to get ahead of higher demand for the product. If they are adding inventory over previous demand, it turns over slower, not faster.
The Main Problem With Green Mountain Coffee Roasters [View article]
"suspicions regarding the main distributor seem valid as it would make it very easy to distort numbers using it." The "suspicions" were started with Einhorn's quotes from "witnesses" which you are taking as fact.
The Main Problem With Green Mountain Coffee Roasters [View article]
You think your guess as to why capex seems high is more valid than the SEC direct questions put to GMCR management. I'd like proof, not a guess that they are capitalizing costs. Tell me how David Einhorn came up with his MBlock witnesses. Did he advertise in the local paper that anyone who works at the company who knows of a massive fraud being perpetrated should get in touch with him? Who are these witnesses? What are their names? Do you think his quotes from these "witnesses" are true? How would you know? I suppose we should take his word for it, he's such an upstanding citizen.
The Main Problem With Green Mountain Coffee Roasters [View article]
The SEC inquiry is almost two years old. The inquiry was started when GMCR informed the SEC that they had made a minor error in a financial statement which they subsequently re-stated with a few cent change in earnings per share. If they had not brought the issue to the SEC's attention, the mistake never would have been discovered. Had the SEC thought there was fraud involved in GMCR accounting practices they would have upgraded to an investigation where they do forensic accounting instead of just asking questions. Not one financial journalist has ever discussed the truth of the SEC inquiry. It's much easier to go for the more sensationalistic case of massive fraud, taking David Einhorn's self serving thesis and quoting his ideas as if they are from some unbiased source. He has been fined for trading on insider information in England (they apparently have a much more diligent securities agency than our pathetic SEC), and for his role as director of New Century (a massive fraud). No one seems to want to question the miscreant's motives as a short seller.
Green Mountain Coffee: Is It Toxic Or Is It Phantom Inventory? [View article]
An inquiry means the SEC asks questions about company practices. You said, "The Securities and Exchange Commission is investigating Green Mountain Coffee's accounting practices." An investigation is different from an inquiry in that it would involve forensic accounting to prove a case of fraud. You are implying the SEC is doing an investigation. There is no investigation.
Green Mountain Coffee: Is It Toxic Or Is It Phantom Inventory? [View article]
GMCR informed the SEC of their accounting problem and eventually made a small restatement of earnings. No one, including yourself, knows if the SEC is still investigating GMCR accounting practices. Unless you are a director at GMCR in charge of finance, you have no idea if the inquiry is active. They admit they mismanaged inventories in the second quarter. Believing that they have purposely inflated inventories so they could create fraudulent revenue statements is a real stretch. This company uses 5% of profits to help charities and coffee farmers, and they give employees paid time off to work for community projects. I suppose that is just a cover for their criminal activities, right, Sam?
GMCR said the warm weather caused a lack of consumer demand for products such as hot apple cider and cocoa (not a problem for Starbucks). They also noted higher raw bean costs and the price increases they passed on to compensate, and that this was the first time they met consumer demand in the first quarter, so there was no carryover of demand into the second quarter as in the previous years. All of these are plausible reasons for their poor guidance for the quarter. Even so, they grew revenue at a 33% rate. With raw bean prices lower and seasonal weather not being a factor, future quarters should be more profitable for GMCR.
Did Green Mountain Coffee Roasters Get Killed By The Warm Winter? [View article]
GMCR is the dominant player in single serve coffee. Regardless of the issues raised by the company's recent earnings report, the fact remains they have a huge market share and a high quality product. The shorts would have us believe there is deep pocketed competition that is going to destroy GMCR margins. This will not happen unless the competition is willing to operate without a decent profit margin for an extended period of time, and I doubt any company would do that knowing that GMCR is already transitioning to the VUE format with new patent protections.
Green Mountain's (GMCR) growth story is dead, says CNBC's Herb Greenberg. The company's CEO all but said so in its conference call, saying “After several quarters of robust adoption, we now expect a more moderated growth trajectory going forward for both Keurig brewer and K-Cup pack sales.” "Moderated growth trajectory going forward?" Those are definitely not words you want to hear from the CEO of a high-flying growth company. Shares -40.6% AH. [View news story]
Herb Greenberg says whatever Einhorn tells him to say. GMCR had an outstanding 1st quarter and then miscalculated demand in the 2nd quarter and had inventory build up. The growth for revenue and eps for the quarter is only around 33%. Yes, lower than their guidance, and the yearly growth will slow to the 50% range, but it is a relatively new business with many hard to predict metrics. This growth story is not dead.
Is Green Mountain Coffee's Inventory Approaching Toxic Levels? [View article]
When you state, "On September 20, 2010, the Securities and Exchange Commission started a probe of Green Mountain Coffee’s accounting practices" you fail to mention that GMCR called the SEC to inform them of the accounting error. The SEC would never have started the inquiry if GMCR hadn't informed them of the error. They were not trying to hide anything and contrary to your argument, this shows that they are an ethical firm. Moreover, the "scathing report" by David Einhorn should be seen for what it is: a biased, self serving analysis by a hedge fund manager who was losing big time on a short position he held in GMCR, to say nothing of his background of being fined for trading on insider information in England and his nefarious manipulation of the mortgage market as a director of New Century. This whole article is a rehash of your previous article. Why post it now?
Green Mountain: Too Far, Too Fast [View article]
Green Mountain Coffee: Don't Count Your Chickens Until They Hatch [View article]
Green Mountain Coffee Roasters (GMCR -6.1%) trades lower after catching some more flak from David Einhorn on CNBC. "Yeah, Keurig is on the way out," was the quote that cut to the bone. Despite all the wild price swings in GMCR during the year, over the last month the stock has traded in a tighter range. [View news story]
Green Mountain Coffee Roasters Butchered Its Acquisitions [View article]
"you forgot the point that GMCR is lowering sales expectations but growing inventory. How does that make sense?"
GMCR did not lower sales expectations during the years discussed in the article.
" What does the sale of fixed assets have to do with anything?"
I did not mean sale of fixed assets. "Product/fixed asset" meant product per fixed asset, or in relation to fixed asset.
Shares of Green Mountain Coffee Roasters (GMCR -2.9%) can't shake off that losing feeling as they dip below the $20 mark. This week's headaches for management include the news that single-serve competition is around the corner from Kroger and Safeway, while the overriding theme on GMCR is that the company hasn't solved the issue of what it will do to counter the patent expirations (I, II) that are around the corner. [View news story]
Green Mountain Coffee Roasters Butchered Its Acquisitions [View article]
The Main Problem With Green Mountain Coffee Roasters [View article]
The Main Problem With Green Mountain Coffee Roasters [View article]
The Main Problem With Green Mountain Coffee Roasters [View article]
Green Mountain Coffee: Is It Toxic Or Is It Phantom Inventory? [View article]
Green Mountain Coffee: Is It Toxic Or Is It Phantom Inventory? [View article]
Green Mountain Gets Roasted Again [View article]
Did Green Mountain Coffee Roasters Get Killed By The Warm Winter? [View article]
Green Mountain's (GMCR) growth story is dead, says CNBC's Herb Greenberg. The company's CEO all but said so in its conference call, saying “After several quarters of robust adoption, we now expect a more moderated growth trajectory going forward for both Keurig brewer and K-Cup pack sales.” "Moderated growth trajectory going forward?" Those are definitely not words you want to hear from the CEO of a high-flying growth company. Shares -40.6% AH. [View news story]
Is Green Mountain Coffee's Inventory Approaching Toxic Levels? [View article]