I haven't a care in the world about the filings for the new Stock based comp plan and option plan it is in every single Fortune 500 company there is bar none. My one and only question about them was really about the "dark period" thing as I saw it on another place, figured it was hustler trader talk but wanted to see if anyone knew.
This is something all companies have, price over .26 people did the same on FRAN talking of it as if it is a penny stock its a fortune 500 company with 93 of the float half by institutions.
And they cancel out one Stock-based Compensation and Market-based Stock Options based on entirely different criteria which all companies have. Kind makes my head spin with the things all of these fortune 500 companies give execs, but, it is what it is. On need only look back at the previous plan and see that the increase on the float was infinitesimal and virtually all are still held by the insiders they were awarded to.
Just like Francesca's people looking at this as if it were some scratch off lottery ticket stock, at some point one needs to set aside their arrogance and think maybe I don;t know everything and maybe I should step up my game and invest in something that is real and there are no worries, I can sleep at night. To worry about dilution in a multi billion dollar fortune 500 company because of a Stock-based Compensation or Market-based Stock Options plan you will never buy another stock for the rest of your life unless its a scratch off lottery ticket OTCBB or Nasdaq startup where worrying about such matters is a prudent course to take. All those used tickets start cluttering up your car after a while.
Fact remains now the company has passed the liquidity threshold with $750 million in liquidity $328 million in cash they can buy the OS entirely if they want. The will be buying shares that's a given if they haven't already. Threshold wasn't passed until after Q4 ended, so they ain't saying and I am glad of it. Would much rather they get shares under a dollar saving money.
They mentioned 3 times in that CC and reiterated in they are have things in motion to increase shareholder holder c=value.
When asked point blank the issue was talked around in an ambiguous way. Which again I like Fortune 500 companies aren't like little companies, they could get the share price now, with $750 in liquidity to over a dollar in an hour and have it stay there. But unlike small companies they don't pump stock to save them selves, they don't have to. They aren't trying to sell stock, they can solve the issue on the "down low" as they say slowly buying stock off the open market now that the threshold had been met.
They don;t have to say they did it til the filing in 2 months, yes it that soon, this late 10K we are not far off from the next filing.
Next week Friday morning if a 13G does not hit SEC I personally am going to consider those 17.5 million shares sold a week ago in the companies hands. After 10 business days a 13G must be filed by the buyer of those shares unless it was the company and then they have to include it in the first 10Q which is the Q the transaction took place.
Common Stock Repurchase Program
In December 2015, the Company’s Board of Directors authorized a $200 million share repurchase program (the “2016 Stock Repurchase Program”). There were no repurchases of common stock by the Company during the three and nine months ended May 4, 2019 and the remaining availability was approximately $181.4 million at May 4, 2019.
Since enacted they have purchased $18.6 million in stock, now they meet the liquidity again, what would you do? My only question.
And I said above the company could get the stock above $1 to stay in an hour, they just say that they are going to be utilizing their stock repurchase plan and plan on repurchasing $10-20 million in stock back. That would be stupid.
The real question, well 2 really, one the 17.5 million shares that someone bought and Golden Capital sold at a discount. Who/Why my only 2 questions on that. As said I will my own opinion come Friday, if it ids't filed by Thursday night that leave only one buyer, for myself.
The company emphasized on multiple occasions in the CC that there would be NO BK AT ALL and second they were working as we speak on ways to increase shareholder value, when pressed they were ambiguous as they should be.
The will do what is best for shareholders you can bet that, not just or mainly really for us, but for these in particular, we matter but these ones really matter, company is going to totally do the best thing for shareholders, that's a given.
Founders son and member of the board JAFFE DAVID R 11,754,158
BlackRock, Inc..............25,919,983.....13.1%
Stadium Capital Management..19,231,162.....9.8% <<<<<Board Member
Dimensional Fund Advisors...15,502,339.....7.83%
Nomura Holdings, Inc........15,105,247.....7.63%
The Vanguard Group..........13,652,497.....6.9%
Sapience Investments, LLC...10,395,417.....5.25%
PRIMECAP MANAGEMENT..........6,663,000.....3.36%
Renaissance Technologies.....5,881,240.....2.97%
Atom Investors Lp............5,872,804.....2.96%
SCHWAB CHARLES
INVESTMENT MANAGEMENT INC....5,266,883.....2.66%
STATE STREET CORP............ 4,886,334....2.47%
CANADA PENSION PLAN
INVESTMENT BOARD.............4,337,756.....2.19%
ICM ASSET MANAGEMENT INC/WA..3,196,943.....1.61%
Connor, Clark & Lunn
Investment Management Ltd....2,980,211.....1.5%
GEODE CAPITAL MANAGEMENT.....2,318,167.....1.17
NORTHERN TRUST CORP..........2,125,676.....1.07%
Bank of New York Mellon......2,038,539.....1.03%
PRINCIPAL FINANCIAL GROUP....1,394,379.....0.70%
Spark Investment Management..1,183,900.....0.59%
Under 900K holders total....17,880,496.....7.52%
Total.....................................93.759%
Second I am going to go back through the filings and see if the last time they bought stock if they mentioned it at all in the CC or PR for the Q or K. We should be getting the K soon will be able to see that and other things that were done/costed out this Q like the $10-15 million in severance they already noted in the last Q as it had just occurred.
On June 4, 2019, in connection with the cost savings target announced during the third quarter of Fiscal 2019, the Company announced a reduction in headcount of approximately 180 employees. This action resulted in severance charges of approximately $10-$15 million which will be recorded during the fourth quarter of Fiscal 2019.
And this was charged in Q4 and showed as losses again losing losers costs a bit but then they are gone, the loser and the costs associated with them.
On May 20, 2019, the Company announced its plan to wind down its dressbarn brand. The wind down is currently expected to be completed in the first half of fiscal 2020. The Company expects to record severance and other closing costs, primarily related to its retail store leases, a portion of which is expected to be recorded in the fourth quarter of Fiscal 2019
Here is just another mention in the notes of costs associated with the change in direction of cutting out the losers, see another $5 million on top of the severance that isn't an ongoing thing its the cost of getting smaller. That .13 loss per share wasn't really .13 in the business it was associated with downsizing its not like going forward they are gonna be losing all this money, they are getting rid of the losers and it costs some to rid ones self of them..............
In Fiscal 2018 and 2019, the Company continued its activities under the Change for Growth program, which started in Fiscal 2017. Specifically, the Company
(i) developed new capabilities such as markdown optimization, size pack optimization and localized inventory planning with the goal of allowing it to better compete in the shifting retail landscape, (ii) enhanced our capability to analyze transaction data to support strategic decisions, and (iii) transitioned certain transaction processing functions within the brand services group to an independent third-party managed-service provider. Other activities included the ongoing fleet optimization store program as the Company continues to renegotiate leases and close stores.
Actions associated with the Change for Growth program are currently expected to continue through Fiscal 2019. As the Company continues to execute on the initiatives, we currently expect to incur additional charges in the fourth quarter of Fiscal 2019 of approximately $5 million for professional fees and have identified capital projects of approximately $35 million to be incurred during Fiscal 2019. Of that amount, approximately $30 million was spent in the first
nine months of Fiscal 2019.
I wanted to point this out and the 180 employees let go which indeed had a severance payment cost that and these professional fees are not costs going forward, its like when you get a divorce, there is a cost associated with it, but, unlike a divorce there is no alimony. Its a one time thing and its done, like the CEO repeated in the CC it s painful now, but, going forward its save $150 million a year.
They knew all this and said as much, that's why they paid their interest payments up 18 months in advance so that would not get in the way of getting the job done and now haven't a payment still for more than a year, and people still talk about it like it matters or a final payment in 2023 which like most companies by that time they will have turned the entire thing around all this will be forgotten and the loan will be partially paid off, or all with a Lane Sale they could purchase a lot before then and what is left which would be much smaller could be refinanced for another 5 years, its what they do, both companies and lenders. But to worry about 3023 or an interest payment a more than a year from now, that is nothing more than fear talk by those wishing to muddy the waters. Truth is they are loaded with cash will be profitable business by 2020 and still no debt payments for 9 months, seriously.
People just read headlines and they think h my god they just continue to lose money they are going to go broke well as can be seen for the cash position and the credit revolver balance that is now at zero costing no interest anymore and the cash having grown from $100 million to $328 million that is not the case. And with the Maurice's sale going forward now that transition costs are done they will receive 49% of the profits and 49% of the sake price going forward when it s sold.
But, one reads the sensational headlines it sounds as if it is just going to lose money forever, just like Francesca's all last year they were burning cash the last CEO mad a lot of mistakes and then Q1 there were a lot of charges and losses in turning the business around.
People just listened to the talkers that no nothing or reading the headlines, not paying attention to the CEO and what he said, because you know CEO's well no your don't maybe two bit hustlers in startups and OTCBB stocks but not real companies people with backgrounds and reputations. Then what happened huge losses turned into big wins once things took effect. One needs to pay attention look where the losses are coming from during a turnaround, they are one time not forever.
Painful now so it can be fruitful in a quarter or two. Dress barn they just talk about oh. they are closing all the stores, my goodness, yeah money losers that cost money to close, but they worked it out and with the liquidation of inventory and deals with landlords they will make it out without losing much if any money and may even make a little because of the lucky time they are closing them, holiday sales time, captive audience. Sometimes people cannot see the forest for the trees.
Headlines are just that headlines and nonsense.
It's like a saying I heard my aunt mention once when someone was gossiping that so and so was messing around with so and so.
She said "were you the third pair of feet in the bed? No? Then you don't know anything"
When this 10K comes out I am going to go through it and find all the charges associated with the closures and cost cuts so the business can be in excellent shape going forward with $150 million a year in savings which is just south of $1 per share. Negatives can go to big positives quick once all the smoke clears, look at Francesca's.
Peace out.
