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DANKA BUS ADR Message Board

  • momentumman2002 momentumman2002 Nov 4, 2005 10:13 AM Flag

    Balance Sheet to Banko

    There is a reality here that is obvious for all who read the Balance Sheet.(This excludes Duckduffer and DFWTRacker) Danka is 1 or 2 more quarters away from Bankuptcy.

    Take a look at the Total Assets vs Total Liabilities. In the last 6 months Danka has managed to erase $100 million in Total Assets and yet there was only a $49 million reduction in Total Liabilities.

    The accounts now stand at $669 million Total Assets & $636 million in Total Liabilities. That would give them an ultra small $33 million cushion of further losses prior to being Banko.

    This alone should give you serious pause until you look a little deeper and see that they are still carrying $205 million in Goodwill on the Asset side. That's right folks, a full $205 million from overpaying for previous acquisitions that still sits on the Balance Sheet as total FLUFF. Take that little nugget out and Danka is already Banko.

    Lets just say that we forget about that little "asset" and move on to just the Current Accounts. What do they show?

    Current Assets: $384 million
    Current Liabilities: $340 million

    How long is it going to take the stellar management of this firm to wipe out this very slim $44 million? That is the $44 million question of the day.

    When they do, it's Good-Bye. Not Reorganization either. Close your doors Good-Bye.

    This is not a technicality. When your Liabilities exceed your Assets that is the definition of Bankruptcy used by all firms in all markets.

    That is the reason that a buyer has not stepped forward too. The Balance Sheet is in tatters and there is simply no worth left to purchase. A Buyer would only assume the debt ridden, Asset fleeced Balance Sheet.

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    • Follow this message link to my prior post if you care to take a look. It is not "proof", but the facts are laid bare and you can make your own decision regarding Danka's financial distress.

      As soon as their auditor gives them a "going concern" warning, it will be too late. The stock will tank further than it is currently.

      That point has to be near. With only $40+ million in assets to waste, it is not going to take management long to drive this company straigt into oblivion.

      Ask yourself how long it's takent them to lose that amount of money in the past? The run rate is 1-2 quarters.

    • tks ,but where was all this knowlodge,when i bought this dog 4 months ago..

      • 1 Reply to bilwil60
      • The (non) BK info was in previous posts...next time, spend an hour and read them before you invest.

        Lowry specialized in taking companies BK (check his history at Anacomp Inc), rolling over the corp debt, forcing bond holders to accept less favorable terms, and taking the public shares down to the same level as wallpaper. Once he realized that he could not do that at Danka USA because of their UK parent, he headed for the hills - where the monks live.

        Say what you will, Danka USA ain't going the BK route.

    • Three more times -

      1) Danka USA cannot go bankrupt - because they are owned by a UK parent company.

      2) Danka USA Cannot Go Bankrupt - Because They Are Owned By A UK Parent Company.

      For those of you that still don't quite get it:

      3) DANKA USA CANNOT GO BANKRUPT - BECAUSE THEY ARE OWNED BY A UK PARENT COMPANY.

      There will be a Pop Quiz tomorrow at high noon; here's the sole question: "Can UK-owned Danka USA go bankrupt?"

      This is not to say, of course, that some idiot company could not, in theory, make a tender offer and buy the USA subsidiary for the tax loss credits then close all the Danka doors and fire most personnel to cut overhead and merge whatever repetitive business is left into their own infrastructure. Not easy nor cheap to close lots of facilities mid-lease or sell them.

      As the evil HR director (Catbird?) in the Dilbert strip states..."People are our most important asset....That's because they are so easy to get rid of."

      In failing companies, such as Kodak, where the historical primary product (silver-based photo film) is in sharp decline and the replacement "savior product" (digital cameras and services) is already an ultra-competitive commodity with little profit margin vs. the historical product, you need flawless execution by the management team to make the transition successful.

      In some cases, instead, the slow pace of this awareness and the failed strategies quarter-to-quarter make it appear that the management team needs the execution.

      Lowry's departure was a clear sign he found the situation hopeless and simply got out when he could.

      The Wiz

      (and remember - study hard tonight for tomorrow's quiz!)

      • 1 Reply to WallStWiz9
      • If you don't think that a NASDAQ traded company(US subsidary of a UK domiciled parent Co.) can't go bankrupt you are smoking something much better than I. Please pass the pipe.

        Patently untrue. When firms sign their NASDAQ listing agreements they are bound by US securities and corporate law, NOT their home countries laws.

        Can you imagine all the recent Chinese listed companies telling the US authorities to go F*** themselves and they are governed by Chinese law? Frickin Please.

        Wouldn't it be great to go get your company listed on multiple exchanges around the world and tell the local authorties that their laws don't govern them?

    • Good Theory - BUT why would Goldman be buying all those shares ?

    • You gotta love guys (?) like Momentumm. Trying as hard as he can to make the case that bankruptcy is around the corner. Trying as hard as he can to create a panic sell from weak hands. Not a nice thing to imply. Bankruptcy occurs when a company is no longer able to meet their financial obligations to creditors/vendors/employees. We're a long way from this occuring with Danka. In your 1-2 quarter end of the world time frame, I fully expect to see an uptick in the value of this stock. Hey, as long as no one takes you seriously, we can all get a smile from your chicken little posts. PS- now would be a good time to post as chicken little.

      • 1 Reply to duckduffer
      • I love your only refutation is so bland and doesn't address my post specifics.

        Duckduffer, as I've said prior you need to extricate yourself from the backass of whatever fowl-feathered friend you have your head buried in.

        I know I'm "bashing" on your blushing bride, but that doesn't make what I'm saying untrue. Maybe you need to consider a divorce? Or how about reading the legal definition of Bankruptcy?

        If you don't think that there is a clause in the bank credit lines and the bond-holders agreements that states that assets have to EXCEED liabilities then you are too daft for my help alone. That is a standard clause and I mean it's in each and every one of those agreements. Again, seek professional help immediately.

        Do you really believe that institutions are going to loan money(hundreds of MILLIONS BTW) to a company and then let said company simply chew through all the assets that secured the loan in the first place? Not bloody likely.

        I do believe they covered that in Business101, but that would assume that you attended some type of institution of higher learning or at the very least can read which is a real leap of faith when reviewing your "Strong Buy".