Logitech Renews Commitment to PC Gaming, Introduces New Lineup

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Logitech Renews Commitment to PC Gaming, Introduces New Lineup

New Logitech G Line of Accessories Proves Science Wins

NEWARK, Calif.–(BUSINESS WIRE)– Today Logitech (SIX: LOGN) (NAS: LOGI) announced the new Logitech® G line, reflecting its new approach to PC gaming. The new lineup includes six redesigned mice and keyboard favorites and two new headsets.

Logitech(R) G700s Rechargeable Gaming Mouse (Photo: Business Wire)

Logitech(R) G700s Rechargeable Gaming Mouse (Photo: Business Wire)

“With Logitech G, we put our passion for science to work for you,” said Ehtisham Rabbani, general manager of the Logitech gaming business group. “Just as gamers are compelled to beat levels, our engineers are compelled to test scientific theories. For close to 20 years the relentless pursuit of what’s next has been our game – and we’re pretty darn good at it. With Logitech G we will continue to push the limits of speed, precision, reliability – even intuitiveness. We do it because gamers expect us to push the limits as far as they do. Every inspired design choice and late-night engineering argument serves but one purpose, to help gamers play their best. When science wins – gamers win.”

Using infrared technology, Logitech studied the interaction between hand and device during gameplay. As a result, gamers can expect to see several advancements in the new Logitech G lineup.

To improve durability and comfort, advanced surface materials were added to strategic tactile zones discovered through testing. For heavy contact zones, Logitech has added fingerprint-resistant coatings, while palm areas feature a hydrophobic coating to help keep your hands from sticking. Depending on the model, the mice also have a soft or dry grip for increased comfort and control. The two keyboards feature a double UV coating on the keys for extra durability and long life, and a fingerprint-resistant coating on the faceplate.

In addition, the Logitech G100s Optical Gaming Mouse and G400s Optical Gaming Mouse feature exclusive Delta Zero sensor technology. Optimized for high-accuracy cursor control, this new sensor technology accurately responds to hand movements. Plus, all of the new Logitech G mice have low-friction polytetrafluoroethylene (PTFE) feet, which reduce drag for faster motions, smoother cursor movements and improved accuracy.

The lineup includes:

Logitech G700s Rechargeable Gaming Mouse

The Logitech® G700s Rechargeable Gaming Mouse is a wireless gaming mouse with the report rate of a wired gaming mouse. In fact, it maintains a consistent report rate, whether over 2.4 GHz wireless or connected by USB, up to eight times faster than a standard USB mouse. If your game goes long, you can keep playing and recharge the mouse simultaneously by switching seamlessly to a data-over-cable connection using a standard Micro-USB cable. The mouse has a durable hydrophobic coating on the palm area that helps keep your palm from sticking to the mouse, and dry grip on the sides ensures a steady hand. You can elevate your in-game skills with 13 programmable controls that let you program single actions, complex macros with multiple keystrokes, repeating and user-defined delays, when you download Logitech Gaming Software (LGS). The Logitech G700s Rechargeable Gaming Mouse is expected to be available for a suggested retail price of $99.99.

Logitech G500s Laser Gaming Mouse

For FPS gamers, the Logitech® G500s Laser Gaming Mouse packs a gaming grade laser for precise cursor control on a wide variety of surfaces and a hyper-fast dual-mode scroll wheel. It also features a durable hydrophobic coating to help keep your palm from sticking and dry grip for a steady hand. It has up to 27 grams of customizable weight and center of gravity adjustment, meaning you can tune it to your preferred play style. You can switch from pixel-precise targeting at 200 DPI to lightning-fast maneuvers at up to 8200 DPI with two buttons sitting in easy reach near your index finger. The Logitech G500s Laser Gaming Mouse features 10 programmable controls, which require LGS. The optional software can also be used to reassign game commands or multi-command macro. The Logitech G500s Laser Gaming Mouse is expected to be available for a suggested retail price of $69.99.

Logitech G400s Optical Gaming Mouse

The Logitech® G400s Optical Gaming Mouse pushes the high standards set by the Logitech® MX518 Optical Gaming Mouse and Logitech® Optical Gaming Mouse G400. This full-feature gaming mouse is built specifically for FPS games and includes Logitech’s exclusive Delta Zero sensor technology for high-accuracy cursor control. It also has a hydrophobic coating to help keep your hand from sticking, as well as soft-touch grip areas and fingerprint-resistant coatings on the primary buttons to resist fading. With LGS, you can customize the eight programmable buttons, and the mouse also features primary mechanical microswitches rated to a 20 million-click lifespan. The programmable buttons allow you to shift through multiple DPI settings to quickly select on-screen options, scan the game map, pull off 180-degree flick-shots at 4000 DPI or downshift for pixel-precise FPS sniper targeting or RTS unit selection at 400 DPI – all conveniently located above and below the scroll wheel. The Logitech G400s Optical Gaming Mouse is expected to be available for a suggested retail price of $59.99.

Logitech G100s Optical Gaming Mouse

The Logitech® G100s Optical Gaming Mouse is simple to use and specifically crafted for your favorite RTS and MOBA games. Built to extend the powerful legacy of the Logitech® G1 Mouse and the Logitech®Gaming Mouse G100, it features buttons designed for heavy clicking and the Logitech exclusive Delta Zero sensor technology for accuracy at any hand speed. While a typical mouse cannot withstand the rigors of intense gaming, the ultra-durable Logitech G100s Gaming Mouse has upgraded primary mechanical microswitches rated to a 20 million-click lifespan. The mouse also has a durable hydrophobic coating on the palm area to help keep your hand from sticking, and the primary buttons have fingerprint-resistant coating to prevent fading. Whether using claw grip or conventional, with small hands or large – the ambidextrous inverted trapezoid shape encourages a sure grip through long sessions. The Logitech G100s Optical Gaming Mouse is expected to be available for a suggested retail price of $39.99.

Logitech G19s Gaming Keyboard

The Logitech® G19s Gaming Keyboard feeds you a steady flow of intel, including vital stats, game specific apps and customizable information panels, all in full color on an integrated, adjustable GamePanel™ LCD. With custom-color backlighting, you can choose from 16 million shades and assign a specific color to every profile and profile mode in the same game. The keyboard also features advanced surface materials for durability and comfort. A hydrophobic coating on the palm rest helps keep your hands from sticking, while the durable double UV coating gives keys extra long life. With LGS, you can configure the 12 programmable G-Keys with up to 36 different functions across three different modes with three macros per key. Two High-Speed USB 2.0 ports let you transfer data to and from accessories – such as MP3 players and flash drives – while also charging battery powered devices. The keyboard also includes anti-ghosting over 26 keys so you can perform multiple complex actions without interference or ghosting. The Logitech G19s Gaming Keyboard is expected to be available for a suggested retail price of $199.99.

Logitech G510s Gaming Keyboard

To make complex actions simple, the Logitech® G510s Gaming Keyboard provides 18 programmable G-keys, which allow you to configure up to 54 different functions across three different modes, with three macros per key, when you download LGS. In addition to custom-color backlighting it features a backlit GamePanel™ LCD, so not only can you stay informed with real-time game stats, system information and VoIP communication data, you can also develop or add community-created applets to work with your GamePanel. It also has a hydrophobic coating on the palm rest to help keep your hands from sticking, and a double UV coating on the keys for extra durability and long life. The Logitech G510s Gaming Keyboard is expected to be available for a suggested retail price of $119.99.

Logitech G430 Surround Sound Gaming Headset

Similar to the Logitech® G35 Surround Sound Headset and Logitech® Wireless Gaming Headset G930, the Logitech® G430 Surround Sound Gaming Headset is powered by Dolby® Headphone technology to create an immersive 360-degree sound field that gives you the advantage of hearing what you can’t see in a game, from footsteps to sirens. With Dolby Headphone 7.1 surround sound, you’ll hear up to seven discrete channels of audio data plus a Low Frequency Effects channel. Similar to the Logitech G230 Surround Sound Gaming Headset, this headset also provides washable ear cups that offer a soft, comfortable fit for long gaming sessions. When you want to be heard, the noise-canceling mic can be adjusted to pick up your voice alone. When the mic is not in use, you can easily fold it up and out of the way. The Logitech G430 Surround Sound Gaming Headset is expected to be available for a suggested retail price of $79.99.

Logitech G230 Stereo Gaming Headset

The Logitech® G230 Stereo Gaming Headset delivers high-quality stereo sound by using 40 mm neodymium drivers to keep you immersed in the game from start to finish for FPS, MMO or adventure-type games. And because marathon gaming yields heat and sweat, the new headset features ear pieces covered with washable performance-sport cloth for a comfortable, soft touch even after hours of use. With a flexible, noise-canceling folding mic, sound is focused on your voice, practically eliminating background noise for better audio quality. In-line audio controls for volume and microphone mute are within easy reach on the connection cable. The Logitech G230 Stereo Gaming Headset is expected to be available for a suggested retail price of $59.99.

Availability

Each of these products is expected to be available in the U.S. beginning in April 2013 and in Europe beginning May 2013. For more information please visit gaming.logitech.com or our blog.

About Logitech

Logitech is a world leader in products that connect people to the digital experiences they care about. Spanning multiple computing, communication and entertainment platforms, Logitech’s combined hardware and software enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the Internet, video security and home-entertainment control. Founded in 1981, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI).

Logitech, the Logitech logo, and other Logitech marks are registered in Switzerland and other countries. All other trademarks are the property of their respective owners. For more information about Logitech and its products, visit the company’s website at www.logitech.com.

(LOGIIR)

Logitech
Elizabeth Van Slyke
510-713-5185
evanslyke@logitech.com

KEYWORDS:   United States  Europe  North America  California  Switzerland

INDUSTRY KEYWORDS:

The article Logitech Renews Commitment to PC Gaming, Introduces New Lineup originally appeared on Fool.com.


Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.




 

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Posted in Executive Prospectus, Financial Prospectus Tagged with:

Show Me the Money, Korn/Ferry International

Filed under:

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows

When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Korn/Ferry International (NYS: KFY) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Korn/Ferry International generated $50.3 million cash while it booked net income of $33.1 million. That means it turned 6.4% of its revenue into FCF. That sounds OK.

All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Korn/Ferry International look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say “questionable cash flow sources,” I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That’s not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With questionable cash flows amounting to only 6.1% of operating cash flow, Korn/Ferry International’s cash flows look clean. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 19.0% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts receivable, which represented 22.8% of cash from operations.

A Foolish final thought
Most investors don’t keep tabs on their companies’ cash flow. I think that’s a mistake. If you take the time to read past the headlines and crack a filing now and then, you’re in a much better position to spot potential trouble early. Better yet, you’ll improve your odds of finding the underappreciated home-run stocks that provide the market’s best returns.

Looking for alternatives to Korn/Ferry International? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, “3 Stocks That Will Help You Retire Rich.” Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

The article Show Me the Money, Korn/Ferry International originally appeared on Fool.com.



Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of
Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Posted in Executive Prospectus, Financial Prospectus Tagged with:

Show Me the Money, Viad Corp

Filed under:

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows

When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Viad Corp (NYS: VVI) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Viad Corp generated $41.5 million cash while it booked net income of $5.9 million. That means it turned 4.0% of its revenue into FCF. That sounds OK.

All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Viad Corp look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say “questionable cash flow sources,” I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That’s not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 47.9% of operating cash flow coming from questionable sources, Viad Corp investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 32.0% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 40.0% of cash from operations.

A Foolish final thought
Most investors don’t keep tabs on their companies’ cash flow. I think that’s a mistake. If you take the time to read past the headlines and crack a filing now and then, you’re in a much better position to spot potential trouble early. Better yet, you’ll improve your odds of finding the underappreciated home-run stocks that provide the market’s best returns.

Looking for alternatives to Viad Corp? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, “3 Stocks That Will Help You Retire Rich.” Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

The article Show Me the Money, Viad Corp originally appeared on Fool.com.



Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of
Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Posted in Executive Prospectus, Financial Prospectus Tagged with:

1 Thing to Watch at CEC Entertainment

Filed under:

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows

When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on CEC Entertainment (NYS: CEC) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, CEC Entertainment generated $37.6 million cash while it booked net income of $43.6 million. That means it turned 4.7% of its revenue into FCF. That sounds OK. However, FCF is less than net income. Ideally, we’d like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at CEC Entertainment look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say “questionable cash flow sources,” I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That’s not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 11.0% of operating cash flow coming from questionable sources, CEC Entertainment investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 5.4% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 72.6% of cash from operations.

A Foolish final thought
Most investors don’t keep tabs on their companies’ cash flow. I think that’s a mistake. If you take the time to read past the headlines and crack a filing now and then, you’re in a much better position to spot potential trouble early. Better yet, you’ll improve your odds of finding the underappreciated home-run stocks that provide the market’s best returns.

Can your retirement portfolio provide you with enough income to last? You’ll need more than CEC Entertainment. Learn about crafting a smarter retirement plan in “The Shocking Can’t-Miss Truth About Your Retirement.” Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

The article 1 Thing to Watch at CEC Entertainment originally appeared on Fool.com.



Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of
Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Posted in Executive Prospectus, Financial Prospectus Tagged with:

Why Willbros Group’s Earnings May Not Be So Hot

Filed under:

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows

When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Willbros Group (NYS: WG) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Willbros Group burned $48.4 million cash while it booked a net loss of $30.2 million. That means it burned through all its revenue and more. That doesn’t sound so great. FCF is less than net income. Ideally, we’d like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Willbros Group look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say “questionable cash flow sources,” I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That’s not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

Willbros Group’s issue isn’t questionable cash flow boosts, but items in that suspect group that reduced cash flow. Within the questionable cash flow figure — here a negative– plotted in the TTM period above, adjustments for gains owed to asset sales constituted the biggest reversal. Overall, the biggest drag on FCF came from changes in accounts receivable.

A Foolish final thought
Most investors don’t keep tabs on their companies’ cash flow. I think that’s a mistake. If you take the time to read past the headlines and crack a filing now and then, you’re in a much better position to spot potential trouble early. Better yet, you’ll improve your odds of finding the underappreciated home-run stocks that provide the market’s best returns.

Is Willbros Group the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in “3 Stocks for $100 Oil.” Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

The article Why Willbros Group’s Earnings May Not Be So Hot originally appeared on Fool.com.



Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of
Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Posted in Executive Prospectus, Financial Prospectus Tagged with: