Anyone have any thoughts on the resignation of the CFO? I'll go ahead and state the obvious; it's got me a little worried.Zach
What, the press release didn't answer all your questions? ;-)Seriously though, I wondered if it had anything to do with the this (from latest 10-Q):The increase primarily resulted from additional marketing, designing, shipping and related expenses caused by the increased unit volume in the nine-month period ended September 27, 2003, costs related to the development of two new product lines launched in the fall of 2003, and approximately $1,300,000 of non-recurring costs associated with settling a vendor royalty auditI'm far, far, far, from an expert here and I know royalty audit's are customary but $1.3 million struck me as quite a bit for Hampshire's size.Reading between the lines it just seems the company wasn't happy with the CFO's performance.Ryan
Reading between the lines it just seems the company wasn't happy with the CFO's performance.That's the best answer I've heard so far.Thanks,Zach
I certainly share your worry concerning the CFO resignation. My particular concern is that the CFO resignation comes a month after Hampshire's selling off of the Hampshire Investments, Limited subsidiary to a company headed by Hampshires CEO. I don't pretend to have the financial sophistication to fully understand this transaction, but wonder is this a red flag I'll wish I had paid attention in the near future.
Bill leaving was unrelated to the royalty audit. That charge was only about half the $1.3m disclosed in the Q -- the rest came from a contract termination reserve related to another employee. The piece attributable to the audit related to a contract interpretation issue with Geoffrey Beane over whether Hampshire had to make starndard advertising contributions even in cases where the downstream retailer was not actually permitted to advertise (such as warehouse clubs) -- there was no financial miscalculation. It's impossible to ever know the real reason in a case, but both the company and Hodge will tell you that it's also unrelated to the management led purchase of the real estate assets or any other financial or accounting related disagreement. It's worth noting that Charlie Clayton, who is the interim CFO while they search for a permanent replacement, is also the former CFO and arguably higher up on the company totem pole than Hodge was.
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