Friday, April 18, 2014

A Quick Look At Some Recent NASDAQ IPO Financials

Sportsman's Warehouse (SPWH)
Priced: $9.50
Current: $9.75

This company owns & operates warehouse stores specializing in outdoor gear, mainly in the western region of the country.

Quick look at the financial data - as reported in S-1/A - April 14, 2014

February 1,
2014
February 2,
2013
January 28, 
2012
January 29, 
2011
(in thousands except percentages, number of stores and square foot data)
Consolidated Balance Sheet Data:
Total current assets
$176,316  $143,511  $111,911  $92,649  
Total assets
224,229  166,563  155,026    122,677    
Long-term debt (including current portion), net of discount
260,184  124,808  59,485  69,576  
Total liabilities
345,325  208,407  104,694  106,266  
Total stockholders’ (deficit) equity
(121,096(41,84450,332  16,411  
Total liabilities and stockholders’ equity
224,229  166,563  155,026  122,677  
Other Data:
Adjusted EBITDA(2)
$70,351  $59,039  $31,546  $17,326  
Adjusted EBITDA margin(2)
10.911.28.45.6
Number of stores open at end of period
47  33  29  26  
Total selling square feet at end of period
1,668,227  1,207,920  1,063,330  957,832  
Same store sales growth for period(3)
(3.7)% 25.413.121.0
Cash dividend declared per common share (on a pre-split basis)
$8.73  $10.39  $—    $—  

YUK! This is about all you need to see right? The company has gone public probably because the total liabilities is about double the total current assets. With margins in the < 10% range, it's going to be difficult for the management to ever dig the company out of a financial hole.

Weibo Corp (WB)
Priced: $17.00
Current: $20.24

Essentially the China version of twitter. The company limits characters to 140 similar to twitter.

Here is some quick financial data via Weibo's F-1/A filing on April 14, 2014

  As of December 31, 
   2012  2013 
   (in $ thousands) 
Selected Combined and Consolidated Balance Sheet Data:
   
Cash and cash equivalents
   2,906    246,436  
Short-term investments
   119,848    252,342  
Total assets
   205,558    606,934  
Amount due to SINA
   393,391    267,722  
Investor option liability
   —      29,504  
Total liabilities
   419,466    370,263  
Mezzanine equity
   —      479,612  
Ordinary shares
   36    37  
Additional paid-in capital
   21,781    31,352  
Accumulated deficit
   (236,736  (274,851
Total shareholders’ deficit
   (213,908  (242,941


You can see the incredible growth this company has achieved in the last year. They've virtually tripled total assets in 1 years time, which is typical with young(er) tech companies. Essentially you are making an investment in the Chinese social media scene. While possible, it's likely this service will only gain traction in one region of the world. Personally I'd only invest in this company if you want exposure to the social media advertising market in China.

Grubhub (GRUB)
Priced: $26
Current: $35.95

Remember Takeout-Taxi? This is basically the same model, just with a mobile app.

Quick look at the financials as posted April 2, 2014 in the companies S-1 filing.

   Year Ended December 31, 
(in thousands)
      2011          2012          2013     
           
Statement of Operations Information:
    
Revenues
  $60,611   $82,299   $137,143  
Costs and expenses:
    
Sales and marketing
   17,198    26,892    37,347  
Operations and support
   13,961    18,165    34,173  
Technology (exclusive of amortization)
   5,651    10,172    15,357  
General and administrative
    9,777       12,249      21,907  
Depreciation and amortization
   4,033    6,089    13,470  
  


  


  


 
Total costs and expenses
   50,620    73,567    122,254  
Income before provision for income taxes
   9,991    8,732    14,889  
Provision (benefit) for income taxes
   (5,220  813    8,142  
  


  


  


 
Net income
   15,211    7,919    6,747  
Dividends on Preferred Stock
   (334  (402  (1,073
  


  


  


 
Net income attributable to common stockholders
  $14,877   $7,517   $5,674

The company attempts to bury how poorly it's doing financially, but notice how net income has been cut in half in 2 years as the company scales up. That's not a good sign. Additionally the business model isn't exactly iron-clad - so a clear winner in the space may never emerge.

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