DJIA 8828.46 +117.33 (+1.35%) S&P 500 1119.49 +16.27 (+1.47%) Nasdaq 1844.57 +38.75 (+2.15%) Value Line ndx 931.31 +7.62 (+0.82%) 30-Year Bond 106 29/32 +13/32 5.64% Yield
Microsoft <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> picked up $4 15/16 to $100 3/4 after a federal appeals court lifted an injunction from a lower court regarding sales of its Windows 95 operating system that included its Internet Explorer browser. The court also dismissed Harvard Law School professor Lawrence Lessig as an advisor on the case. The injunction, originally granted in December, sought to prevent Microsoft from forcing PC makers to include the browser along with Windows 95 on their computers under the premise that the OS and the browser are independent products. While today's action is separate from the Justice Department's pending antitrust case against Microsoft, the ruling could come back to haunt the Feds when their case goes to trial later this summer. The court's statement that the combined OS/browser arrangement is a "genuine integration" lends support to Microsoft's key contention that tying or "bundling" the systems together is not prima facie anticompetitive.
Casino and hotel operator MGM Grand <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MGG)") else Response.Write("(NYSE: MGG)") end if %> rolled $5 9/16 higher to $32 3/16 after announcing a plan to repurchase up to 12 million common shares, or about 20% of its outstanding stock. In the first step of the transaction, the firm will conduct a self-tender offer in July for up to 6 million shares at a price of $35 per share, which is a 31% premium to its closing price of $26 5/8 per share yesterday. The remaining shares will be bought back in a second tender offer at a later date. The plan overshadowed MGM Grand's later announcement that its fiscal Q2 EPS will be between $0.25 and $0.30, below last year's $0.56 and missing the First Call mean estimate of $0.41. The company blamed the shortfall on the Asian financial crisis, which has prompted the region's big-time gamblers to bet less of their fortunes on the casino's craps and baccarat tables.
Intel <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> gained $1 3/8 to $75 1/4 after Robertson Stephens said this morning that Intel's Pentium 223 and Pentium II 400 chips are on allocation, which means good things for PC makers from the high end to the low end. Morgan Stanley added today that SRAM and semiconductor component maker Taiwan Semiconductor (NSYE: TSM) is showing increased order activity. Thenews helped PC makers, as well, with Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> gaining $5 1/4 to $93 1/8, Gateway <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GTW)") else Response.Write("(NYSE: GTW)") end if %> moving up $2 1/16 to $47 13/16, Micron Electronics <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MUEI)") else Response.Write("(Nasdaq: MUEI)") end if %> up $1 1/4 to $12 3/16, and IBM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %> up $3 5/8 to $111 3/4. Finally, Hewlett-Packard <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %> gained $2 to $59 1/2 after an official told the Wall Street Journal that H-P's consumer PCs are selling well with no downturn in sales expected this year.
QUICK TAKES: Just about any stock related to the Internet gained ground today as market participants continue to speculate that some of the Web darlings will be snatched up by large media companies in the days ahead. Yahoo! <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> gained $8 1/2 to $148 1/16, Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> advanced $11 5/16 to $92 11/16, Lycos <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LCOS)") else Response.Write("(Nasdaq: LCOS)") end if %> climbed $4 1/4 to $68 3/4, and America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> added $5 1/8 to $106 1/4... Internet services provider EarthLink Network <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELNK)") else Response.Write("(Nasdaq: ELNK)") end if %> rose $4 3/8 to $76 3/8 after signing a co-branding arrangement with website operator and software developer go2net Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GNET)") else Response.Write("(Nasdaq: GNET)") end if %>. Under the deal, EarthLink users will be offered access to go2net's games and chat community areas.
Telecommunications equipment maker Lucent Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %> rang up $3 3/4 to $78 1/2 after signing $62 million worth of contracts with Chinese firms, including two agreements involving China Telecom... Fiber optic communications network operator Qwest Communications International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QWST)") else Response.Write("(Nasdaq: QWST)") end if %> rose $2 7/16 to $31 15/16 after signing a nine-year deal to provide line service to local exchange carrier Electric Lightwave <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELIX)") else Response.Write("(Nasdaq: ELIX)") end if %> worth $122 million... Local access and high-speed communications systems developer ADC Telecommunications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADCT)") else Response.Write("(Nasdaq: ADCT)") end if %> picked up $1 21/32 to $32 5/8 after acquiring privately held optical signal management devices maker Princeton Optics Inc. for undisclosed terms... Radio Shack parent Tandy Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TAN)") else Response.Write("(NYSE: TAN)") end if %> added another $2 15/16 to $49 7/16 after selling its Computer City chain yesterday to PC retailer CompUSA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPU)") else Response.Write("(NYSE: CPU)") end if %> for $275 million in debt and stock.
Rambus Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RMBS)") else Response.Write("(Nasdaq: RMBS)") end if %> rose another $11 to $57 1/2 after gaining 20% yesterday on news that chip giant Intel <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> has started system testing of Direct Rambus-enhanced dynamic random access memory (DRAM) chips... Consumer appliance maker Sunbeam Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SOC)") else Response.Write("(NYSE: SOC)") end if %> bounced back $2 7/16 to $11 1/4 after falling 26% yesterday on news that the SEC is taking an informal look at the firm's accounting practices... Arlington, Virginia-based investment bank Friedman Billings Ramsey Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FBG)") else Response.Write("(NYSE: FBG)") end if %> gained $9/16 to $14 7/16 after Bear Stearns started coverage with a "buy" rating... Cruise ship operator Royal Caribbean Cruises <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RCL)") else Response.Write("(NYSE: RCL)") end if %> sailed $3 7/16 higher to $78 1/2 after announcing a two-for-one stock split, payable on July 31.
Several cable TV companies rose on reports that long-distance carrier AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> may form alliances with the firms to gain access to the local telecom market. Cablevision Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CVC)") else Response.Write("(NYSE: CVC)") end if %> jumped $7 1/4 to $62, Tele-Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCOMA)") else Response.Write("(Nasdaq: TCOMA)") end if %> advanced $7 1/4 to $62, Comcast Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CMCSA)") else Response.Write("(Nasdaq: CMCSA)") end if %> moved up $2 3/8 to $39 3/4, and MediaOne Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UMG)") else Response.Write("(NYSE: UMG)") end if %> climbed $2 1/8 to $41 1/4... Microchip Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MCHP)") else Response.Write("(Nasdaq: MCHP)") end if %> gained $1 1/8 to $23 9/16 after announcing two new electrical erasable programmable read-only memory (EEPROM) devices featuring "the world's smallest size, fastest write time, and lowest operating currents"... British tobacco company B.A.T. Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BTI)") else Response.Write("(NYSE: BTI)") end if %> rose $11/16 to $19 11/16 a day after a Florida appeals court overturned a $750,000 judgement handed down in 1996 against its Brown & Williamson Tobacco subsidiary.
Homebuilder Kaufman and Broad Home Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KBH)") else Response.Write("(NYSE: KBH)") end if %> rose $4 7/16 to $31 5/8 after reporting fiscal Q2 EPS of $0.42, beating the Street estimate of $0.35. Also, Goldman Sachs raised its rating on the company and three other homebuilders to "trading buy" from "market perform." Centex Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CTX)") else Response.Write("(NYSE: CTX)") end if %> gained $2 1/4 to $39 3/8, Pulte Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PHM)") else Response.Write("(NYSE: PHM)") end if %> added $1 7/16 to $29 15/16, and Ryland Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RYL)") else Response.Write("(NYSE: RYL)") end if %> advanced $2 3/8 to $24 1/8... Semiconductor mask pattern generation systems firm Etec Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ETEC)") else Response.Write("(Nasdaq: ETEC)") end if %> jumped $3 7/8 to $34 1/8 after announcing it will repurchase up to $30 million of its outstanding shares... Computer network designer and conversion manager International Integration <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ICUB)") else Response.Write("(Nasdaq: ICUB)") end if %> moved up $7 5/8 to $19 5/8 after selling 2.5 million shares in an initial public offering at a price of $12 per share.
Pharmaceutical developer Roberts Pharmaceutical Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: RPC)") else Response.Write("(AMEX: RPC)") end if %> advanced $2 3/8 to $22 after Merrill Lynch raised its long-term rating to "buy" from "accumulate" and Donaldson, Lufkin & Jenrette started coverage with a "buy" rating ... Toronto-based pharmaceutical company Biovail Corp. International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BVF)") else Response.Write("(NYSE: BVF)") end if %> rose $2 1/16 to $32 1/16 after signing an exclusive Canadian marketing agreement with drug developer Celgene Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CELG)") else Response.Write("(Nasdaq: CELG)") end if %> regarding Celgene's d-methylphenidate treatment for Attention Deficit-Hyperactivity Disorder (ADHD)... Speech recognition technologies firm Lernout & Hauspie Speech Products <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LHSPF)") else Response.Write("(Nasdaq: LHSPF)") end if %> climbed $3 3/8 to $58 1/2 after forming a joint venture with privately owned National Dispatch Center Inc. to sell voice-activated pager technology to wireless telecommunications companies starting this fall.
Napa Valley fixture Robert Mondavi Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MOND)") else Response.Write("(Nasdaq: MOND)") end if %> took a spill, falling $2 1/2 to a 52-week closing low of $29 9/16 today after giving investors guidance on its expected year-end 1998 and full-year 1999 financial performance. Overall, the wine maker cited a slower-than-expected recovery (lower volumes and higher promotional costs) in shipments to non-chain wine purveyors as the reason for the decline. The company expected 20%-25% shipment growth in the fourth quarter but will have to settle for 10%-12% growth, versus 7% for the industry. Back in January, Mondavi dropped $7 11/16 to $40 1/8 on the day that it warned that its Q3 results would be hurt because it couldn't produce enough Chardonnay to keep up with retailer demand. Earnings per share may be as much as $0.15 below both analysts' expectations of $0.54 for its fiscal fourth quarter and $1.98 for the year ending June 30. On its conference call with investors, Mondavi gave its forecast for 1999 EPS of $2.05. The 6% downward adjustment of 1999 EPS currently puts Mondavi at 14.4 times these new 1999 numbers.
Pfizer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PFE)") else Response.Write("(NYSE: PFE)") end if %> fell $1 3/8 to $110 1/8 on news that another major health management company has decided it won't pay for the drug company's hot-selling impotence pill Viagra under its regular coverage. Last week, Kaiser Permanente, which has 9.1 million members, said it would stop coverage of Viagra but that employers would be able to buy supplemental coverage for Viagra as well as other drugs for sexual dysfunction. Now, according to The Wall Street Journal, Aetna Inc.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AET)") else Response.Write("(NYSE: AET)") end if %> Aetna/U.S. Healthcare managed care unit, which has 13.7 million members, won't cover Viagra but will give employers the option of paying more to cover the drug, like it does for coverage of birth control pills. These decisions not to cover Viagra may embolden other large insurers that are still pondering whether they will cover the drug to lower the axe on Viagra. PacifiCare Health Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PHSYA)") else Response.Write("(Nasdaq: PHSYA)") end if %>, Humana <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HUM)") else Response.Write("(NYSE: HUM)") end if %>, and Prudential HealthCare, a unit of Prudential Insurance, all have installed interim policies that don't allow coverage. Cigna Corp.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CI)") else Response.Write("(NYSE: CI)") end if %> Cigna HealthCare now covers up to six pills a month, while United HealthCare allows for as many as eight a month.
QUICK CUTS: Dutch electronics, lighting, and semiconductor company Philips Electronics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PHG)") else Response.Write("(NYSE: PHG)") end if %> lost $3 3/4 to $83 1/2, trading six times its 30-day average volume, on comments from its chairman that May had been a "tough month" in Asia... Computer networking products maker Cabletron Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CS)") else Response.Write("(NYSE: CS)") end if %> fell $1 7/8 to $12 7/16 after reporting Q1 EPS of $0.04 (before charges of $0.97 per share) compared with EPS of $0.37 in the year-ago period. The company also announced that it will acquire NetVantage <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETVA)") else Response.Write("(Nasdaq: NETVA)") end if %>, maker of Ethernet workgroup switching products, for about $100 million... Ultramar Diamond Shamrock Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UDS)") else Response.Write("(NYSE: UDS)") end if %> was knocked down $1 7/8 to $30 1/2 after announcing it has terminated discussions with Petro-Canada regarding the formation of a refining and marketing joint venture primarily because of concerns raised by Canada's Competition Bureau.
Electrical powertrain and other auto parts maker Delco Remy International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RMY)") else Response.Write("(NYSE: RMY)") end if %> lost $11/16 to $13 1/2 as the United Auto Workers strike against General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> continued with no end in sight, idling most of GM's North American operations. Delco Remy, which was spun off from GM in 1994, generates about 28% of its sales from GM... Wireless communications wholesaler and retailer CellStar Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CLST)") else Response.Write("(Nasdaq: CLST)") end if %> dropped $2 1/4 to $25 1/8 after reporting Q2 EPS of $0.27 compared with $0.24 in the year-ago period and in line with analysts' estimates, taking into account a 2-for-1 stock split that went into effect today... Specialty chemicals company LeaRonal Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LRI)") else Response.Write("(NYSE: LRI)") end if %> slid $1 3/16 to $22 11/16 before the company announced that it knows of no corporate development to which it can attribute the recent volatility in its shares. It anticipates that sales and earnings for the quarter ended May 31 will be similar to the comparable fiscal period last year.
Chromatics Color Sciences International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CCSI)") else Response.Write("(Nasdaq: CCSI)") end if %> fell another $1 7/8 to $5 3/8 in the wake of a class action lawsuit filed on behalf of shareholders alleging that the company made false statements about its operations and products, including a device to monitor jaundice in newborns... Quigley Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QGLY)") else Response.Write("(Nasdaq: QGLY)") end if %> fell $1 3/8 to $7 1/2 after the Journal of the American Medical Association published a study showing that students receiving zinc gluconate lozenges did not recover from colds significantly faster than those taking placebos. Quigley makes zinc gluconate glycine lozenges, which it claims reduces the duration and severity of the common cold... Marine construction company TransCoastal Marine Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCMS)") else Response.Write("(Nasdaq: TCMS)") end if %> was shaved for a $9/16 loss to $5 23/32 after announcing that for the year, earnings could be 35% to 40% lower than the current mean estimate of $1 per share.
Specialty finance company Hanover Capital Mortgage Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: HCM)") else Response.Write("(AMEX: HCM)") end if %> slid $1 11/16 to $10 7/8 after warning that it expects a Q2 loss of $0.05 to $0.10 a share because prepayment speeds on the adjustable rate mortgage-backed securities purchased by the company in Q4 1997 accelerated in Q2, depressing earnings... Electronic components manufacturer Richey Electronics <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RCHY)") else Response.Write("(Nasdaq: RCHY)") end if %> lost $1 to $6 3/4 after announcing that Q2 EPS from operations before charges are expected to be about 25% to 35% lower than the $0.21 in Q1. Analysts had projected EPS of $0.22... Document finishing, paper shredders, film lamination, and visual communications products company General Binding Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GBND)") else Response.Write("(Nasdaq: GBND)") end if %> was shredded for $1 3/8 to $32 7/8 after announcing it expects Q2 EPS of $0.35 to $0.37, down from $0.45 in the prior-year period.
FOOL
ON THE HILL
An Investment Opinion
by
Alex Schay
Risk Roadmap
When surveying a company's financial landscape, perhaps the best means of getting a handle on the various elements that impact its business in any given period is the financial statement section entitled, "Management's Discussion and Analysis of Financial Condition and Results of Operations," commonly referred to by the shorthand designation "MD&A." In fact, when perusing a 10K or annual report it is advisable to begin the digging at the sign labeled "MD&A." Usually with the first spade full of information comes a discussion of all the factors that make reported results non-comparable -- a rich deposit indeed.
The MD&A's purpose is to present a view of the company's business through management's binoculars. The SEC -- thanks to Item 303 of Regulation S -- mandates the inclusion of an MD&A in the financial statements. However, the SEC's guidelines are exactly that, guidelines, and companies can choose to get by with just a cursory discussion of the relevant items in hopes that the SEC reviewers let them get away with it. The rules outline that a company includes the results of its operations, its liquidity, and its capital resources.
Some firms outline their MD&As in exactly this fashion, but others choose to report the same information segment by segment. However, as Jack Ciesielski of the Analyst's Accounting Observer writes, "Permeating all sections of the MD&A: registrants must discuss any known trends, favorable or unfavorable, that they may reasonably expect to have impacts on operations, liquidity or capital resources -- and they should make such discussions on a segment basis, if it would enhance the reader's understanding of the business." The gray area for most companies is the manner in which they consider the relative "materiality" of events. Here are the actual guidelines, taken from Section 303:
Results of Operations
(1) Describe unusual or infrequent events, transactions, or economic changes that materially affect reported income.
(2) Describe any known trends or uncertainties that have had -- or can be reasonably expected to have -- a material favorable or unfavorable effect on net sales or revenues or income from continuing operations.
(3) If know events will affect relationship between costs and revenues (such as a known increased labor costs), the change in the relationship must be disclosed.
(4) If there are material increases in net sales or revenues, discuss whether the increases were due to price or volume increases or new product/services introductions.
(5) Discuss the impact of inflation on net sales and revenues and income from continuing operations for the last three years.
Liquidity
(1) Identify known trends or demands, commitments, events or uncertainties that will affect registrant's liquidity in a material way. If deficiency is identified, discuss actions taken or proposed in order to fix it.
(2) Identify and describe internal/external sources of liquidity.
(3) Discuss any material unused sources of liquid assets.
Capital Resources
(1) Describe material capital expenditure commitments as of fiscal period end.
(2) Indicate general purpose of such commitments.
(3) Indicate expected source of funds for commitments.
(4) Describe known material trends -- favorable or unfavorable -- in capital resources.
(5) Indicate any expected material changes in mix and cost of such resources, discussing changes between debt, equity and off-balance sheet financing.
Taking a look at wine maker Robert Mondavi <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MOND)") else Response.Write("(Nasdaq: MOND)") end if %>, which continued its downward slide today after reporting its expectations for the fourth quarter and next year, the central issue over the last year has been its ability to deal with a Chardonnay grape shortage (resulting from poor 1995 and 1996 harvests). In the midst of the crisis, the company reported the following information in its fiscal 1997 10K MD&A:
Fiscal 1997 was an outstanding year for Robert Mondavi. Despite an industry-wide shortage of premium wine grapes, the Company achieved record sales and earnings which reflect the quality and strength of its brands. The revenue growth in fiscal 1997 reflects strong consumer demand for the Company's brands which helped offset the cost impact of the California grape shortage.
Although the Company expects the grape shortage to continue during fiscal 1998, the Company has already begun to see the results of steps it has taken to improve its global wine supply. During fiscal 1997, the Company introduced its first imported wines: Caliterra, produced by the Company's joint venture in Chile; and Vichon Mediterranean, wines sourced from the Languedoc-Roussillon region of France. Sales of these imported wines accounted for 27.4% of the sales volume growth for the fiscal year. In addition, the Company continued to increase its vineyard and land holdings, adding more than 1,000 acres during the fiscal year, and the Company continues to evaluate new opportunities to improve its long-term wine supply.
Even though the company essentially reported that it was effectively dealing with the problem, it is important for investors to remember that any issue included in the MD&A is akin to a pronouncement that it may have a material effect on reported earnings in the future and therefore warrants a closer look. It is a roadmap of known risks, conveniently laid out for investors with clearly defined points of interest. Very few events that negatively affect a company's business come completely out of the blue, and those that do usually aren't included in the MD&A.
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
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Contributing Writers Yi-Hsin Chang (TMF Puck), a Fool Brian Graney (TMF Panic), Fool Two Alex Schay (TMF Nexus6), Fool, too Dale Wettlaufer (TMF Ralegh), Final Fool
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