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How to make a mistake when trying to decipher cryptic company press releases

Entry revised on 11/06/13 12:12 PM

I made a fairly major mistake last week dealing with a business section news item, related to Coldwater Creek. The Sandpoint women's retailer sent out a release saying it would restructure and cut expenses significantly.

It provided a few numbers but did not provide exact numbers on the impact on jobs, which is what many people really care about.

In the absence of information, I tried to generate some of the missing data, and I messed it up.

Here's the scenario that I hope others can learn from: The release from CC said its efforts would reduce “corporate workforce” expenses by 20 percent.  It didn't say how many jobs that meant, and an effort to reach the company for that number did not succeed.

I needed to get some kind of number and I assumed I could work it out, based on public information. I will skip the math I used to come up with the conclusion that “several hundred jobs” would be cut. Using limited absolute numbers, I figured  it would come to at least 300 jobs. 

The next day company representatives informed me that “several hundred” was wrong and I was told it was “less than 100.” We corrected the online story and ran a correction the next day.

I made an inquiry about the types of jobs cut or how to understand “corporate workforce,” but I failed to get additional clarification.

An inside company person said the job number at the Sandpoint office and headquarters was “around 50.” But that was an unofficial guess not for the record.

 

 

 

Coldwater Creek’s stock over past five years: a humbling graphic

The good news for investors in Coldwater Creek, it has to get better.

We spotted this chart in the Sandpoint-based women's clothing retailer's annual report for the fiscal year ending Feb. 2. The chart came with the company-written explanation below.

 If you can't read the graphic, here's the summary of what the FOUR key lines represent: (Also, click the chart to enlarge it.)

SOLID line with rectangle is Coldwater's stock valuation measured as an index starting in Feb. 2008 at 100. All four indices started at the same 100 point five years ago.

DASH line: NASDAQ composite.

DOT dash line: S&P apparel retail group.

SOLID line with circle: Apparel peer group.

The following graph compares the cumulative five-year total return to stockholders on Coldwater Creek Inc.'s common stock to the cumulative total returns of the NASDAQ Composite Index, the S&P Apparel Retail Index, and a customized peer group of Chico's, Christopher & Banks, and ANN INC (referred to as the “Peer Group”). Due to Talbots, one of the companies that was included in the Peer Group for fiscal 2011, becoming a privately held company, and in an effort to include a broader range of companies that includes industry sectors in which we operate, instead of comparing our stock performance to an individually selected group of peer companies, we have used a published industry index. Accordingly, for fiscal 2012, we are including the S&P Apparel Retail Index and we do not intend to present the Peer Group in future fiscal years. The stock performance shown below is not necessarily indicative of future performance.

Coldwater Creek gets a nice stock price bump, up 17 percent to $5.72

Just in time for the holidays, we spotted a nice Friday afternoon pop for Coldwater Creek's stock price, on the Nasdaq.

A few months ago the company had to do a reverse-split to keep the price per share above $1. When it did that, its recalculated price came to about $3.89 or so.

Today it rose to $5.72, up 17 percent from Thursday's closing price.

Recent announcements that might have helped the Sandpoint women's fashion retailer is a third quarter report that showed it's trimmed losses, and the announcement this week that a new CEO will take over in January for co-founder Dennis Pence.

Things are picking up stock-wise. Friday's trade volume was 412,519 shares, compared with a recent average volume of  211,332 shares.

Coldwater Creek on a roll, passes $4, in part due to reverse stock split

Catching up after some time away:  Sandpoint women's apparel retailer Coldwater Creek is faring better, stock-price-wise, since it went through a recent four-to-one reverse split.

The change took effect last Monday on the NASDAQ exchange where CTWR trades. A number of analysts have taken note and are moving their ratings from neutral to hold. They're citing improved apparel choices and a strong push to attract more purchases through customer loyalty programs.

The company's CEO and President Dennis Pence said, in a release, the split “was necessary for us to maintain our listing position on the Nasdaq Global Select Market, attract high quality investors and more effectively capitalize on the positive changes we have made to our brand which we believe will result in sustained long-term profitability and shareholder value.”

The stock price this week is above $4.

The charts above and below show the stock's climb. The top one adjusts stock prices to agree with the new split price. The one below doesn't.

Also notable: daily volume is very small and is shown in the lines at the lower half of the chart below.

Coldwater Creek sets election for reverse split, plus details the range of split

Coldwater Creek, looking to keep its stock listed on the Nasdaq, is preparing a special election for stockholders to approve a reverse stock split.

The election is now set for Friday,  Sept 21 at 9:30 a.m. at the women's fashion retailer's Sandpoint office. 

Our earlier story last week didn't have the date. It also then didn't have the reverse split.

The proposal is a reverse split no less than 1-for-3 and not more than 1-for-6. The vote gives the company board the option to choose the level of split.

If you're a stockholder and want to get a ballot, this link gets you what you need.

To read the full proxy proposal, it's linked just below this text box.


Documents:

Coldwater Creek proposes reverse stock split to remain listed on the Nasdaq

Sandpoint women’s apparel retailer Coldwater Creek is proposing a reverse stock split to keep the company trading on the Nasdaq market.

A filing with the Securities and Exchange Commission proposes a vote by Coldwater shareholders to approve the split. Neither the date for the election or the split ratio has been decided, said company spokeswoman Bobbi Earle.

The Nasdaq rules state a company’s stock will be delisted if it remains below $1 a share for 90 days following a notice of possible delisting.

Nasdaq sent that notice to Coldwater Creek in mid-June. Its share price was last above $1 on May 10. Since then its price has fallen to 45 cents and as high as 80 cents.

It closed Monday at 63 cents.

While struggling to revive its stock price, the company has earned some market support because of a recent infusion of cash from equity firm Golden Gate Capital. Last month the San Francisco-based fund announced it’s lending Coldwater Creek $65 million.

In exchange, Golden Gate Capital gets to choose two directors to Coldwater Creek’s board.

Coldwater Creek’s week started with a bang, and then the market grew cautious

This past week Coldwater Creek got a dose of cash from a major investor. The announcement that Bay Area private equity firm Golden Gate Capital was lending $65 million helped boost the company's public stock to above 80 cents per share.

That's the highest it's been in since May.

Since Tuesday, the stock has drifted a bit lower, as can be expected. The good news: It's closing higher than it was last week.

The charts below, from Yahoo Finance, show the stock price over the past week. 

On Friday Coldwater Creek filed an amended report summarizing the investment from Golden Gate. Here's the explanation for where the $65 million will go: 
“The proceeds of the Term Loan Agreement will be used for debt repayment, to finance the acquisition of working capital assets, and for other general corporate purposes.  On July 9, 2012, the Company used $14.8 million of the proceeds to repay its term loan with Wells Fargo Bank.”

 

 

Monday

Tuesday

Wednesday

Thursday

Friday

Opening Price

$0.46

$0.56

$0.80

$0.71

$0.67

Last Trade

$0.52

$0.80

$0.74

$0.67

$0.69

Price Change

$0.06

$0.24

$-0.06

$-0.04

$0.02

% Change

13.04%

42.86%

-7.5%

-5.63%

2.99%

Day´s High

$0.52

$0.82

$0.84

$0.71

$0.73

Day´s Low

$0.45

$0.56

$0.70

$0.66

$0.67

Volume

757,430

6,148,151

2,154,086

834,570

263,154


Cost cutting in Sandpoint and across the country: Coldwater Creek’s job cuts

Recently we took a look at the slow and painful progress Coldwater Creek has made in recovering from a difficult retail-apparel market.

One thing we couldn't get, in time for the story, was the change in headcount for the Sandpoint publicly traded company (CWTR is the Nasdaq symbol).

Cost cutting certainly has occurred. In 2010 the firm had 9,680 total workers, with 738 in Idaho.

As of June 2012 the numbers are 6,912 total employees and 589 in Idaho.