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Author: geekytoo One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 13  
Subject: a slippery slope Date: 1/19/2009 11:09 AM
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What appears below is dated, it's based on that company's last 10-Q filed in October 2008.

I'm trying to get more familiar with CACH. As a quick exercise, I had a look at the company's earnings for the last few years. Performance wasn't stellar, but neither did it look like an imminent collapse in earnings was in the offing. Yes, sales were going down, but the company still made money in '07.

In the last 10-Q (for the quarter ending with the end of September '08), the company was reporting a loss of about 20 cents per share. On an after tax basis, the company expects a loss around 13 cents per share. Much of the loss stems from store closing costs (store exit costs in the 10-Q). Taking the store closing costs out of the equation, losses would have been 1.5 cents per share for the quarter.

The company is closing 16 stores.

Now the company is expecting a loss of 48-50 cents per share. What else is going on? Is it closing more stores? Why is it bleeding cash?

Operating cash flow for the last reported quarter was $-343 thousand, compared to +12.6 million the year before. This comes from the store closings and the bad sales figures.

The company is burning through cash. Its current assets have dropped by 27%, cash fell to one quarter what it was a year ago. Marketable securities are down to about sixty percent what they were a year ago.

It's not looking good at all. The stock market seems to think so too.
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