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Speed Commerce, AŞ Message Board

  • jayand777 jayand777 Feb 6, 2013 6:12 PM Flag

    Key question

    I can't believe nobody asked the ONE glaring obvious question. Exactly WHAT makes SpeedFC's profits seasonal and when? When the merger was finalized in November, Willis said that there would be no impact on profitability this fiscal year ending in March because Speed's primary profit was seasonal and had already been booked before the sale. What??? Doesn't make sense. Most retail companies book their biggest quarter in Oct-Dec. It is not for Speed? Why? When then? And none of these rocket scientists asked. Does anyone have an idea? Makes it kind of hard to model without this info.

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    • As to Speed FC's sales seasonality, I suspect because they have a large number of clothing retailer clients, that "back to school" sales likely represent the largest portion.

      Sentiment: Strong Buy

      • 1 Reply to jxenge
      • That's true and clothing has been a driver for e-commerce. If I've read correctly else where, the 4th qtr e-commerce sales report comes out on Feb15. A little buzz might stir a lot more interest again, for Navarre.

        Here's some qrtly data for US e-commerce sales. I read an estimate that places sales for last qtr, above 60B. I don't use Excel, but I think these data can be overlaid according to year in order to see comparative growth between the two recent years and each year's ramp up, beginning in spring (3-31), then continuing through each calendar year.

        [Dec. 31, 2012 60+B]
        Sept. 30, 2012 56.99B
        June 30, 2012 54.94B
        March 31, 2012 53.09B
        Dec. 31, 2011 51.58B
        Sept. 30, 2011 48.58B
        June 30, 2011 47.58B
        March 31, 2011 46.06B

        Another interesting chart (easy to find online) is the percentage of e-commerce accounting for retail sales. Not only is linear growth observed year-to-year, but, within each year, the growth of e-commerce (percentage of retail sales) ramps up, then falls off and flattens during the 1st qtr of the calendar year. The other relevant thing is that variability of this pattern within each calendar year has been widening, so that the difference between each peak (typically 4th qtr) and flatline trough (typically 1st qtr) has been increasing. I haven't done the math, but maybe the variability within each year is proportional to the growth year-to-year.

    • This sounds like one of those gasb fasb things that I know so much about, so I have two questions about the question you're asking. If the everything was finalized on 11-20, are you asking specifically about earnings from then till 12-31? And when you asked about effect on Navarre's profitability for this fiscal year, is your question directed at something Willis said earlier or in the latest cc? I'm asking the second question because according to the SA transcript he said, "While SpeedFC will contribute revenue to the remainder of Navarre’s fiscal year, its adjusted EBITDA is seasonal and a large portion was generated prior to its acquisition [I'm supposing that's prior to 11-20]. During fiscal 2014, we’ll have the benefit of consolidating SPEED’s peak season financial results." Accounting isn't my thing, but it sounded reasonable to me, including the general calendar summary regarding retail sales.

    • Yes, that would have been THE question to ask. I haven't a clue either. I could possibly understand SPEEDs profits being lumpy or slightly irregular due to timing issues similar to many businesses but seasonal I don't get. You might want to try sending an email question to Navarre IR, I've gotten some answers in the past that way. It seems like the type of question that they might answer.