I was browsing the 10-k and there is a section regarding rebates, chargebacks, discounts, ect. I don't understand how all that works, but I saw some large numbers in there (like tens of millions).
Is it possible that WK is reporting gross sales, but perhaps SPPI is providing steep discounts to get customers to use Fusilev? Which could account for the difference between WK reported sales and actual?
Don't know why A/R are so huge if the sales for the quarter includes A/R, but I have a feeling SPPI is offering large discounts to grow accounts.
sharonconl, I owe you a sincere apology.
Not that I called you name or anything close to that, but I hate the manner I responded to your opinions above which lacked the due respect differing opinions well deserve.
I will have to make sure I do not get involved again in another heated discussion after an exhausting and frustrating day of work:) But I do not really need an excuse here. I have done something wrong. No excuses ever change it.
Now it should be quite clear who really are the "very smart people" you referred to. They are:
(1) Raj SHROTRIYA, CEO of the company,
(2) the short sellers who shorted SPPI all the way from $17 to $12.
Pay attention to what they say and, more importantly, actually do.
I read all 100 of your posts and got some pretty insightful knowledge. So thanks. However, all the while I was reading the only question I was looking for is one none of you very smart people answered. Is this a good company with great growth potential and will it go up as a long term investment? Is this a good entry point or should I continue to monitor a pull back? Thoughts (simple or complicated) is very welcomed.
Sometimes I wrote the post on Notepad or Word and then post. Still that often got blocked. You are right, sometimes it could be due to a symbol from Word processor that offended YMB.
YMB really sucks, to say the least.
> "I do not see where a company cannot state A/R without all allowances taken at any point in time."
Company has already stated A/R without all allowances consumed. Nothing wrong with that. Here I assume when you said "allowances taken" you mean "allowances consumed" rather than "allowances made".
But if you have meant "allowances made," that would be a totally different story. FAS 48 requires estimates (e.g. for future returns) to be able to be reasonably made before revenue can be recognized. No room here.
> "They need to be making estimates of bad debt and other allowances. Of course, the estimates are just that estimates and they can be wrong."
Again that's been my understanding too.
> "It is hard to read too much into A/R numbers especially with SPPI because of the fact that they have a few large distributors. If an Amerisource Bergen either pays them or not prior to the end of a quarter is going to have a huge impact on this number."
Agree too. Timing issue can indeed impact A/R. One quarter alone certainly does not make a trend. But that does not prevent any prudent trader from putting an "A/R spike" on a watch list for upcoming periods. Over time, it will either prove to be false alarm or it will escalate into real issues.
> "If you want to look at A/R it is almost better to have monthly numbers to get a better idea of how it is trending."
I would go the other way: by looking at longer-term trend. Plus, how can you access their monthly financials without being an insider? Isn't it true public traded companies in this country only issue quarterly and annual financial reports?
> "I don't think you can attempt to directly correlate A/R in any way with gross or net revenue. You are better off looking at the allowance percentages between periods to see if there have been changes in estimates."
When I said "A/R is gross revenue" I'm only referring to when revenue is first recognized.
For example, say SPPI recognizes $20M of net revenue from a big customer C in Q3. The corresponding contribution from C to A/R will be, say $22M, rather than $20M. In this example I just assume the allowances for C to be $2M. I should have made that clearer earlier.
Hopefully this clarifies it.
> "I haven't looked at the financials but from looking at the post in this stream it looked like there was a credit amount in bad debt and then a debit amount for the next period. That looks like an estimate gone bad if that is what the financials are really showing."
Company filing clearly documented how allowances are made, consumed, modified/recovered. No guesswork here. Estimates almost always turn out to be wrong. So traders don't really gain much by knowing an estimate has gone bad. They probably just need to make sure management are not terribly wrong on these things.
t10bagger and inquisitive, before you post your message copy it first, just in case it doesn't post you can try again.
Sometimes when it doesn't post, you have to look back through your post and see if there is a word in it that these Yahoo clowns consider offensive.
Many times I have removed a single word and reposted my copied version and it would take.
They really have gotten ludicrous with their csnsoring.