GMCR Refuses to Explain How Exactly LongShortTrader’s Report is “Flawed”
July 18, 2012 3 Comments
LongShortTrader released a report titled, Green Mountain Coffee Roasters’ Profits: Overstated or Misunderstood last Thursday morning, and GMCR’s Suzanne DuLong provided the following response last Friday (after market close), via the Wall Street Journal:
“The report erroneously defines the data that was reported and therefore the subsequent analysis is flawed,” said Suzanne DuLong, vice president of investor relations at Green Mountain. “Specifically, it misrepresents the facts by comparing segment to consolidated numbers.” – Suzanne DuLong, Wall Street Journal.
LST stands by the report. LST e-mailed Ms. DuLong (see e-mail in the bottom) Monday morning, asking how exactly the report was flawed, and received no response from her. LST tried again yesterday morning, and still no response from DuLong.
Note the following:
(1) GMCR did not comment at all on Sam Antar’s report titled Green Mountain Coffee’s Numbers Submitted to S.E.C. Examiners Don’t Add Up (also released last Thursday) despite the fact that Antar’s report implies a material impact on past and future earnings.
(2) GMCR did not comment at all on the Stifel Nicolaus report released last Friday, where Mark Astrachan cut his earnings estimate by 21% and fair value estimate to $14 per share.
(3) Lest we forget, the company never really responded to the 500 pound gorilla in the room either, i.e. Greenlight Capital (except via legally safe, indirect statements such as “we are confident there is no wrongdoing”)
(4) Rather, GMCR chose to respond to LongShortTrader, the 89 pound gorilla in the room, with a terse statement.
One is left wondering why GMCR chose to pick on LST, only to keep mum the moment LST asks for elaboration. Perhaps there is more to the segment numbers then they would care to publicly admit. Whatever the case, LST has uncovered some additional problems with the accounting/numbers, to be released publicly in the near future.
By the way, GMCR will announce earnings August 1st. For what it’s worth, they have reported earnings in late July for at least the last 2 years.
EMAIL TO SUZANNE DULONG
Good Morning Ms. Suzanne DuLong,
LongShortTrader (“LST”) contacted you yesterday (per the email shown below), did not hear back from you, and wanted to send one more time:
LST released a report titled, “Green Mountain Coffee Roasters’ Profits: Overstated or Misunderstood” (attached to this email for your convenience) last Thursday morning. You then responded on behalf of GMCR, via the Wall Street Journal on Friday, with the following (which was posted after market hours last Friday):
“The report erroneously defines the data that was reported and therefore the subsequent analysis is flawed,” said Suzanne DuLong, vice president of investor relations at Green Mountain. “Specifically, it misrepresents the facts by comparing segment to consolidated numbers.”
LST stands by the report. Please explain exactly, in detail, the following:
(1) How does LST’s report erroneously define the data that was reported?
(2) How is LST’s subsequent analysis flawed?
(3) How does LST’s report misrepresent the facts by comparing segment to consolidated numbers?
Your response would be very much appreciated. Perhaps you (and/or CFO Frances Rathke) could answer the above questions in a discussion between GMCR and LST, moderated by the Wall Street Journal, CNBC, or Reuters (or a media concern of similar caliber). LST is more than happy to accomodate to your availability, and schedule.
LST understands that earnings is approaching, and that you may be busy, but based on your response, it would seem to require little to no effort to explain exactly how LST’s analysis is flawed.
Thanks for your time. Look forward to hearing you.