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What I overlooked when investing in this company was the very large stock based compensation expense buried in G&A expenses....about $36 mil over 3 years (2012-2014). Are you kidding me? This is a significant hurdle to climb trying to grow EPS. This expense in itself is the equivalent to $1.25 EPS (pre tax).
Sales and margins are getting all the attention, but this expense should get some coverage and further explained. Hey, good for the handfull getting this comp, but not so great for the EPS of the company. Stock based comp is hitting the EPS (after tax) for 6 cents a share each quarter....yikes.
Chaz I always enjoy your thought out and researched comments.
Here is a little venting regarding my 20,400 votes of confidence in SKUL.
Besides having just taken a colonoscopy with a wire brush. I can say that the time for "play time" for management is over. It is pretty obvious to me that they are really into the "life-style" internal at SKUL. New offices, great big fat stock grants, party's all over the world (I just saw a video released on youtube promoting a new European office. Some skateboarder riding around the office pointing out the "video game room", Man cave with ping pong table, and more disturbing... saying he had to sign off to join the party going on at the "open bar".
This all was "cool" when the numbers were growing, EPS and Rev was rocking. Now management downgrades the EPS by 15% for the year (and frankly sounded like they had been hitting a few too many "open bars" or "smoking rope").
I'm stuck here holding my "unit" in my hand while the high-life is going on in Park City.
They better stop smoking hemp, and start getting the bottom line sorted out!
Having said all that, the product is not going down the tube (and that is not a skate ramp Andrus).
Stop playing and return some equity to the shareholder and PREPARE for the next Earnings call.
Disappointing and you hit the nail on the head with all your points. If they reigned in the spending a just a little bit they would have beat the numbers and not had to reduce guidance. A few million in budget cuts would not have affected sales one bit. I had more hope for this management team than this... Disgusting really. Talk about being blindsided!
Thanks for breaking out the numbers Chaz. I brought that very thing up months ago, before you were posting here, back when Payne was preaching against the evil shorts and prophesying a rapturous squeeze. I was a reed shaking in the wind, my warning of the enemy within was only met with praise for this young management team. I said it then and now you make it clear; it's nothing more than legal fraud.
In spite of this excessive comp (IMO), I do believe in the company, their brand and business model. Marketing is working as proven by sales growth and the product is solid based on reviews and customer satisfaction.Sure margins may be pinched, but that should be offset by increased sales and what I think should be lower expenses. All said, I think magmnt is solid and certainly thinks highly of themselves:)
And under no analogy should it be trading at this price. If I were management, I'd take this company private for a 50% premium ($15 per share) and then they could pay themselves even more and lose the headache of being public.I would think private equity would be licking their chops about now.
i understand the concern with such stock based compensation, but how does that benefit the person receiving it if the stock price plummets? wouldn't that person do everything he/she could do to bolster the stock price? why not just pay themselves with more cash instead of stock?