The company's balance sheet has often appeared to be quite attractive, with relatively large amounts of cash, and little or no debt, but as the losses mounted, the cash dwindled, ending the latest quarter at about $40 million. Still, that means that E Land is effectively getting K-Swiss for about $130 million or $3.65 per share if you back out the cash. The deal also prices K-Swiss at a relatively low 1.55 times net current asset value.
Interestingly, K-Swiss' latest quarterly earnings report showed one of the most narrow losses, $1.9 million, or five cents per share, that the company has had in years. The loss was well below consensus estimates ( a loss of 13 cents per share), although that consensus is comprised of just 2 analysts. It's difficult to conclude that its narrower quarterly loss was a sign of better days ahead, as revenue was down 16% versus the same quarter last year.
Of course, there are some not at all happy with this deal, and several law firm investigations of K-Swiss, as it relates to the E Land deal were hitting the newswires on Friday.So it goes in "value" land. At the time of publication the author held no positions in any of the stocks mentioned. Follow @JonMHellerCFA This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.