EDS' Free Cash Flow Slowed in 2001 By Herb Greenberg Street Insight Senior Columnist 3/8/2002 12:36 PM EST
Fried-Day
EDS edification: Free cash flow is a new, big focus at EDS (EDS - commentary - Cramer's Take) -- so big, in fact, that the company crowed in its fourth-quarter press release about a big jump in free cash flow from a year earlier. At the time, this column made a big (no, make that huge) deal over how the company changed its definition of free cash flow and didn't bother to tell anybody. (The change made the number look bigger!) The company still hasn't responded to my inquiry about the changed definition.
Enter the company's 10-K, filed Wednesday. The company mentions free cash flow -- something it didn't mention in the same document a year earlier -- and according to the document, "Free cash flow, measured as net cash provided by operating activities less net cash used in investing activities excluding those related to acquisitions, divestitures and marketable securities, was $197 million in 2001 ... Free cash flow was $330 million in 2000." So, while it may have gone up in the fourth quarter from a year earlier, it fell for all of last year from a year earlier -- and not by a pittance.
A.C.L.N. antics: If you haven't already heard the news (or didn't see it on Thursday's Columnist Conversation), three of four outside directors at A.C.L.N. (ASW - commentary - Cramer's Take) quit. The fourth -- the one who stayed -- is the company's outside counsel in Cyprus. Two of the others who quit -- Charles Brock and Michael Doherty -- have longstanding ties to the company as an outside securities attorney and investment banker, respectively. The other departee, Earl Gould, is a money manager. The company says it will discuss the resignations and the status of its business in a conference call next Wendesday. Nothing like being timely.
Finally, Black-Boxed in: Southwest Securities analyst Robert Damron Friday lowered quarter and year-end guidance for Black Box (BBOX - commentary - Cramer's Take). He cited anticipated lower-than-expected March quarterly sales. "We recently learned that Black Box is mandating that its entire workforce take one week off without pay during the month of March. This suggests to us that the company's revenues are tracking below plan." (Duh!) But don't worry, he still ranks it as a strong buy.
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback and invites you to send any to Herb Greenberg. Greenberg also writes a monthly column for Fortune.
Brian Harris and Mark Martinez assisted with the reporting of this column.
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