Huh? Did you read the press release? They did make an official statement on it. General Counsel would have zapped out that statement from the press release if they weren't 99% confident of having no material impact.
"The Audit Committee promptly commenced an investigation last week and has not yet reached any conclusions. Based on currently available information, the Company believes that the completion of the Audit Committee’s investigation will have no material impact on its previously issued financial statements, its 2015 first quarter financial results, or its current guidance."
Could be anything at this point and more to come...? Also, ZQK may or may not have to revise prev, earnings after its internal audit as at the moment they do not know. No official statement had been made yet, we have to wait.
Since this is for Q1, revenue double counting could cause prev. fiscal to be revised causing greater concerns with SEC and consumer rights law groups. YIKES...takes time to clear up one way or the other. And just hangs over this beaten stock.
And previously we have scene in May 2014 due to accounting issues the stock drop from $6 bucks down to $3. Later to only tank again, this time by 27%, due to poor sales in Q3 2014. So hold on, 2015 will be a "bumpy road" but all trending lower and lower to Q4.
And now with the short interest in ZQK jumping to 10.2% on March 2, 2015 coupled with other clothing youth brands sales up today things are looking locked down for some time here and really the komodo has been opened on the management restructure given the brand's sales numbers, debt, free cash on hand, new competition, ability to market to target audience, license deals value (from very little to possibly none, could be a lost cause just one big party expenses for the last of the Quik gang; no one tracks or follows it (sound familiar..) as such has happen w/other brands ran by ZQK), and very questionable talent at officer & director levels.
I have been following this stock many years. I agree that the debt level is not too good. However, they have recently wrote down their good will. This should have been done long time ago as their purchase of Rossignol was a flop. Not too sure I spelled that company correctly.
Having said that, I believe the new management team is revamping the business model to lessen the operating cost and improve its profit margin. I like the idea since Liz Claiborne has done great using the same approach.
Furthermore, their quick ratio gives them time to implement their new business model. I think we should see a nice pop as long as they are telling the truth about the recent announcement. The recent finding on revenue cut-off issue was reported by the management team to their audit committee. It would be much worse if it was the other way around.
Hmm, you've looked at their financials right? I keep on seeing the LT debt and frowning. Not a huge fan of levered retail companies.
I might go long if the stock drops further, but I'll look at the LEAPS. With the stock price this low, you can't use margin - so might as well go the option route.
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I'm going to take a swag and say it's a revenue timing question between quarters. There are a bunch of stupid revenue recognition rules especially with regards to revenue accounting. Cost accounting makes things a bit easier, but still annoying. (A dumb example of this would be online orders need to recognized based off when the customer receives the product rather than when you ship it. Testing over a period of time is established on what days shipments are included into one quarter or the next.)
The key part of the statement is that it will have no material impact on prior statements, Q1 or current guidance. For me, the bigger concern is the weather. Apparel companies tend to put Spring assortments in Feb. Can't imagine many people are buying spring clothes during the cold snap.
It is understandable that the audit committee wants to investigate its revenue cut-off. As long this is all, ZQK will have a nice bump to the upside. Prior to this news the stock has fallen more than 10%. Probably this story was already leaking. Nevertheless, this may be a nice buying opportunity.
Got this alert from Ultimate Stock Alerts (search google for them) and I doubled my money
in one day
Well, as Warren Buffet said, bad news comes in a series....You find a cockroach in the kitchen and a few days later you meet his relatives....
Quiksilver Inc. has delayed its first-quarter earnings release scheduled for Thursday after identifying a ‘revenue cut-off issue.’
I've taken big equity positions before, but I don't the stomach to drop $350K on an options trade. I am guessing it's a long position and not writing for the premium.
Seems like an oddball / outlier trade, but who knows.
I was very opposed to the Rosignol deal and wrote McKnight several letters to that effect.
Not only was it in the wrong clothing area, ZQK way overpaid for a very obviouisly declining ski equipment business.
AR....agreed. They better show some improvement. I voted for all the directors except McKnight. He ruined the company with the Rosignol purchase (among other failures) and it is painful to see him making $1 Million salary plus much more