Coastal Contact's Woes Continue...

[HindSight2020]

Normally when a company sees continued growth and market domination, the result is good news, but is not always the case.

Proof that CC's long term growth plan is not sustainable, slowing and continues to bleed red...

Run the numbers - although a 7% growth rate ($13M) over the previous year, they're net loss only improved by $400K. A financial model such as this is certainly not paying stock dividends to its shareholders anytime soon.

CL sales seem to be flattening out which is interesting since these are repetitive sales, so it seems people are not utilizing as much as they were previously. Its no wonder they stated their new growth strategy is glasses, as this sector grew 22%.

A message to all independents - lower your eyewear selling costs, be more competitve and focus on service! Coastal can't compete on service!!!

Remember who their suppliers are folks, because when the bottom eventually fails out, guess who's doors they will be crawling back to try and regain their market share.

<<VANCOUVER, British Columbia—Online optical retailer, Coastal Contacts Inc. (NASDAQ: COA) (TSX: COA) (Stockholm: COA) reported it reached record sales of $196.1 million, increased eyeglasses sales to $48 million and contact lens sales to $148.2 million for the 2012 fiscal year, according to financial results for the fourth quarter and fiscal year ended Oct. 31, 2012 released Dec. 19, 2012. Total sales were up 7 percent, eyeglass sales were up 22 percent and contact lens sales were up 3 percent when compared to the same period in 2011.

For the year, Coastal reported a net loss of $4.9 million for the fiscal 12-month period, compared with a net loss of $5.3 million in the comparable period a year ago.>>

http://www.visionmonday.com/ViewCont...6/Default.aspx

[Golfnorth]

Hi Hindsight;

Is it possible that they have adapted Amazon's business model of not being interested in profits before a certain critical mass or domination of their segment has occurred? Don't get me wrong........I'm glad about their red ink but if my theory is true then a corporation can only sustain those losses for so long until they have to raise their prices. Truly the clock is ticking for them. Tick, tock, tick, tock

Regards,
Golfnorth

[HindSight2020]

Hi Hindsight;

Is it possible that they have adapted Amazon's business model of not being interested in profits before a certain critical mass or domination of their segment has occurred? Don't get me wrong........I'm glad about their red ink but if my theory is true then a corporation can only sustain those losses for so long until they have to raise their prices. Truly the clock is ticking for them. Tick, tock, tick, tock

Regards,
Golfnorth

You are absolutely correct -the clock is ticking and I'm sure they're getting board committee pressure by now. Even if their secret strategy is to duplicate the Amazon business model, once they've reached that magical market saturation/domination point, there's only one to go from there and that is up.

And once the price increases are implemented, consumers will complain and boycott big time, so all your previous hard work is eroded quickly and you're back to square one (and with a ton of debt!)

[Golfnorth]

Just looked at their financial statements briefly.
They have 8.3 millions dollars of goodwill.
Hmmmmmmmmmmmmmmmmmm.

Regards,
Golfnorth

[idispense]

Ah yes , umm , where is that telephone number for General Motors ? Well never mind just get me the telephone number for Chrysler ? Well how about the telephone number for Corel ?



Whats that ? You say they are losing money and will cease to exist ?

[idispense]

ah yes the manufacturing plants are churning out 100,s of thousands of widgets per day and operating at peak perfomance , but the market slows down and the normal retail shelves back up so we need an asset recovery plan of worldwide proportions to dump that stuff and recoup $$ while still keeping the factories pumping out product and keeping employment up , what that ? you say you have a plan ? and it will only cost $ 5 million ?

and whats that you say ? the worst that could happen to General Motors is a Government bailout with public dollars while letting the public shareholders take the debt crunch loss and the debt free emergent company continues onwards and upwards while the government bailout gets repaid by the new share capital being purchased by the public again, then as the debt free emergent is able to be profitable from a zero debt beginning , then the share price rises and the public exposes themselves more and once again the bailout was free ... just a hiccup


some say loss, some say profit ... others say a big screen TV wouldn't help you see the big picture

[idispense]

Now lets say I have worldwide production facilities and my fixed costs are X , if the market burps a brain fart and my lead time to open a window for fresh air is Y then I have a real big problem if the burp and fart lasts longer than my lead time Y to open a window . So if I have a plan known as "BFLT" then what I do is recognize that any dollar I recieve for any product above a peak perfomance number will actually result in a reduction of my total fixed costs as long as I can cover my variable costs V then I will actually be more profitable selling at a reduced yield than not .

Now if my lead time Y is further complicated by my reaction time "R" then the function R times Y will result in backed up inventory "H" ( for huge ) , so now if I don't have plan "BFLT" in place to look after "H" then I am "S" ( for ? )

So if "H" occurs then any $ are better than no dollars sooooo on a worldwide basis of a few hundred countries $ BO is only BO/150 +- or $ 33,333.00 per country which in my mind is "PFC"

if "PFC" was absorbed by none other than "SHE" .... shareholders equity ..... then PFC = 0 and that is PFC !

[idispense]

now one might ask how does one get publicity to sell H ? Hmmmm it would take free country by country repetitiveness


what would an acronym be for country by country ?

[HindSight2020]

textbook example of last 4 posts