For what it's worth, I meant it when I said that VEND had burned through a lot less cash this most recent quarter than what might have been expected. And they managed to do that without driving accounts payable through the roof.
How'd they do it? Well, it appears that cash came from converting (a) Due from franchisees, (b) Inventory, and (c) Deposits, into cash, and by increasing liabilities in (x) Deferred revenues, (y) Rescissions payable and (z) Accrued personnel costs.
And that result, it seems to me, is largely a combination of prudent reductions in investments in inventory and a reduction in working capital requirements brought about by a lower level of franchise sales. Longer term, that could become a problem, but in the short term, it seems to have helped cash-flow wise.
Oh, and the cash loss may have been a bit lower since some of the expenses such as stock-based compensation are non-cash.
One unfortunate thing for the departing franchisees is that they are being forced to provide financing for the business, and that sure helped VEND make it through the quarter.
So, DDR, I'm not all about the negatives. I prefer to be factual and somewhat objective, and I don't mind pointing out the positives when I see them. It's just too much fun to point out management's foibles, failures and dishonesty. There's just so much material there! And it's just so much fun to dig into it!
I am destined to be disappointed, since I have conflicting desires. I would like to see Nick Yates and company receive their just rewards, and I would like to see investors and franchisees come out fine. Those two things are unlikely to both happen. At least I'll be happy if you make money even if Nick sails off into another sunset.
