Nov 27, 2009

Conn's

In this Southeast Texas Political Review article, Philip R. Klein accuses the Beaumont Enterprise of bias for reporting third quarter results by Conn's. The firm recently settled a suit by the Texas Attorney General that alleged the company engaged in deceptive trade practices.

According to Philip R. Klein:
They DID WRONG - but they stood up - and counted themselves up - and admitted that they were wrong
According to Conn's Chairman, Dr. William Nylin:
"Conn’s denied those allegations in our answer to the suit and we continue to deny them today. The terms of the settlement provide that Conn’s denies any wrong doing.”
Conn's faced civil penalties of $20,000 per complaint. Since at least 2,000 complaints had been filed, even someone with limited math skills like Philip R. Klein can figure out the bargain Conn's got by paying $4.5 million to end the action. The company actually diluted its loss of 68 cents per share with a "goodwill impairment charge:"
Diluted loss per share was $0.68 for the third quarter of fiscal 2010, including a $9.6 million non-cash goodwill impairment charge and $3.7 million non-cash fair value adjustment. The adjusted diluted loss per share excluding these items was $0.29.
So while the company agreed to pay $4.5 million in penalties, the company claimed an adjustment worth almost twice that in its 3rd quarter. Isn't it ironic how a shrewd businessman like Philip R. Klein missed that?

PRK compounds this blatant falsehood with his own ignorance:
Here comes the media again on the attack - pointing out the Conn's is showing a 3 quarter loss? And that is news? Why is that news?
Quarterly profits and losses are regularly reported, but Klein apparently doesn't read the financial sections.

The Texas Attorney General filed this suit in May 2009, so Conn's profits were already heading south before AG Gregg Abbot made his announcement. I suspect the world recession of the past year had more to do with Conn's falling profits than "trust issues" based on media reports.  Furthermore, the Conn's business model may not be competitive with the big box stores, since consumers typically avoid stores with smaller inventory and high-pressure sales tactics these days.

The news release from Conn's is quite clear about this and the possible consequences:
The recent declines in the economic conditions in the Company's markets have negatively impacted its operating results. As a result, there is a reasonable likelihood that the decline in the Company's operating results could trigger covenant violations under its credit facilities, beginning January 31, 2010, unless it is able to sufficiently improve operating trends, reduce the amount of debt outstanding on its balance sheet or amend the covenants contained in its and its QSPE's credit facilities. The Company has initiated discussions with its lenders and is reviewing options to reduce the balance of debt on its balance sheet prior to January 31, 2010.
Rather than actually research the real issue, Philip R. Klein simply made up more fictions, based on his own biases:
Well - we will tell you why it is news and why the media is going after Conn's.

Revenue dropped. Hmmm....wonder why? A trust issue maybe? Well - sure enough. According to Conn's corporate - they are taking a huge hit in the marketing and had to show an impairment write off being a chance to ...  well....try and recover.

And.....a major cut back in .... no way......media?

You have to be kidding right? Cutting back advertising?
In releasing its third quarter financials Conn's made no such statement regarding "cutting back advertising."  Neither did the Enterprise article. 

Klein ends his sophomoric analysis with this observation:
Because the media in general hates business. Unless they have a check to give them?

Remember - the left hates business. The right is business. And thus the culture class in politics. And guess what? It is what it is.
Compare Philip's childish statement with the real facts. From USA Today on the Presidential Election of 2008:
In this election, however, Obama has bested McCain among employees and executives in finance, insurance and real estate; health; communications; law; and "miscellaneous business," according to the center's tally of contributions through August.

McCain has maintained the traditional Republican lead in transportation, construction, defense, energy and agribusiness.

In the miscellaneous business sector — which includes retail, service industries and many small enterprises...Obama has taken in $20.5 million from that sector to McCain's $13.4 million, records show. Those numbers don't include September and October, when Obama was raising tens of millions but McCain's campaign was not taking private donations. McCain accepted $84 million in public financing while Obama opted out of the federal system.

Obama has taken in twice as much as McCain from employees of pharmaceutical and related companies, the center found. And Obama has raised $5.1 million from workers at computer and Internet companies, compared with McCain's $1.3 million.

Among Obama's contributors, 5,845 list "CEO" or "chief executive" in their title, compared with 2,597 of McCain's donors, according to election records compiled by CQ MoneyLine. 
It's also interesting to remember some of the businesses that Philip has defended in the past. He claimed Mike Young would not file for bankruptcy

Philip also defended Goldstar EMS and made this prediction:
The Southeast Texas Political Review has learned this afternoon that the former owners of Goldstar EMS, whose offices were raided by the FBI and Medicare investigators has noticed the United States Attorney of the "Intent" to file for $205 million dollars in damages against the United States Justice Department and related agencies.

Mark our words...it could be one of the biggest cases and miscarriages of justice in the history of this region.

This may be the biggest legal story to hit in years and will go national.
As requested, I marked Philip's words, but I'm still waiting on that national news. 

Bottom line: actions speak louder than words. While Philip claims he's on the side of business, his history of litigation against other businesses says something else.

3 comments :

Anonymous said...

How much did klein get for that endorsement?

Anonymous said...

I hope that Conn's does not go bankrupt due to the semi-endorsement.

Anonymous said...

Maybe Klein has a late bill due and he's trying to buy some time by kissing up...?