• Announcements

    • iacas

      GAME GOLF Ryder Cup Contest   09/22/2016

      Join our GAME GOLF Ryder Cup Challenge to win an autographed GAME GOLF, a Pebble Steel watch, and many more great prizes!
Sign in to follow this  
Followers 0
newtogolf

Edwin Watts Files For Bankruptcy

46 posts in this topic

Quote:

Edwin Watts Golf Shops, the golf-specialty retailer that claims to offer the largest inventory of pro-line golf equipment, apparel and accessories through its 90 domestic retail locations and via its web portal, filed for Chapter 11 bankruptcy protection, Bloomberg reported.

According to papers filed Nov. 4 in U.S. Bankruptcy Court in Wilmington, Del., and cited by Bloomberg, the Fort Walton Beach, Fla.-based retailer listed assets and liabilities between $100 million and $500 million. Callaway Golf is the largest unsecured creditor, with a claim of $4.6 million. The retailer also said it had obtained a loan of as much as $38 million to fund operations in bankruptcy.

Edwin Watts, which was founded in 1968 and is owned by private-equity firm Sun Capital Partners, noted in its filing that it agreed to sell certain assets to GWNE.

The full filing is: Edwin Watts Golf Shops LLC, Case No. 13-12877, U.S. Bankruptcy Court, District of Delaware.

Appears the golf industry is still hurting given one of the largest golf retailers filed Chapter 11 today.  I placed an order yesterday with them, I guess it's 50/50 whether I ever get the products I ordered.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

Want to get rid of this advertisement? Sign up (or log in) today! It's free!

Crap. I knew I should have got some stuff on lay-away.
0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

This could have a major ripple effect since they owe Callaway Golf $4.6M.  Callaway had a profitable year but I'm not sure it was profitable enough to absorb this loss.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

This could have a major ripple effect since they owe Callaway Golf $4.6M.  Callaway had a profitable year but I'm not sure it was profitable enough to absorb this loss.

I'm not knowledgeable of corporate accounting but I doubt they counted the money already, right?

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

Appears the golf industry is still hurting given one of the largest golf retailers filed Chapter 11 today.  I placed an order yesterday with them, I guess it's 50/50 whether I ever get the products I ordered.

So they filed for bankruptcy today, and you placed an order with them yesterday?

I'm no detective but ... I'm going to have to say that is pretty convincing evidence that this is, at least partly, your fault!!!

No way that is a coincidence. ;)

---------------------

I haven't bought anything from them in a long time, but my old irons were purchased there.  I loved the fact that, at least at the time, they sold everything with, basically, a flat shipping rate of, like, 8 bucks.  IIRC, Golfsmtih, at the time, had a sliding S&H; scale based solely on price, so it was going to be a lot more expensive to buy from them.

It was the only service I ever got from EW, but I loved it.  Too bad.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

I'm not knowledgeable of corporate accounting but I doubt they counted the money already, right?

No, it's not counted as earnings until the bill is paid.

The last 3 years they've averaged $4 million in bad debt write offs and they still have $6 million set aside as a provision for bad debts.

0

Share this post


Link to post
Share on other sites

I'm not knowledgeable of corporate accounting but I doubt they counted the money already, right?

I don't know how Callaway Golf handles their corporate accounting but companies that size typically don't manage their books on a cash basis but instead use an accrual method which means they record sales when the order is made or delivered not when the cash / check is received.  I'd guess all or a major portion of the $4.6M is reflected on their 3rd Quarter P&L; and their internal Accounts Receivable has Edwin Watts down for $4.6M.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

The last two posts conflict. Right?

I don't know if a company can count money as received if it's not. I had to count a sizable check in 2010's taxes because I got it on December 31, even though it was for services to be rendered January through June in 2011.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

No, it's not counted as earnings until the bill is paid.

The last 3 years they've averaged $4 million in bad debt write offs and they still have $6 million set aside as a provision for bad debts.

You're right, at the end of their accounting year they will write off bad debt and make adjustments to their P&L.;

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

The last two posts conflict. Right?

I don't know if a company can count money as received if it's not.

It goes into accounts receivable until the bill is payed. Then it goes into operating cash flow.

0

Share this post


Link to post
Share on other sites

The last two posts conflict. Right?

I don't know if a company can count money as received if it's not. I had to count a sizable check in 2010's taxes because I got it on December 31, even though it was for services to be rendered January through June in 2011.

You can manage your accounting on a "cash" method or "accrual" method.  If you're on a cash method you pay taxes in the year you receive the monies.  Accrual method you pay taxes based on when you deliver the product or render the services.

In my business (service based) I would not report the income until the year that the services were rendered.  Our balance sheet has Unearned Revenue under our Liabilities and Equity section that we reduce for each month of service we provide against the prepayment we received for the services.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

It goes into accounts receivable until the bill is payed. Then it goes into operating cash flow.

All revenue (sales) is reported in P&L; when order is made and products / services are delivered in accrual method.  P&L; doesn't reflect Accounts Receivable or cash flow.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

So does this mean they'll start selling their inventory for pennies-on-the-dollar to try and sale everything in stores?

0

Share this post


Link to post
Share on other sites

All revenue (sales) is reported in P&L; when order is made and products / services are delivered in accrual method.  P&L; doesn't reflect Accounts Receivable or cash flow.

The net gain or loss from the income statement is the operating cash flow on the statement of cash flows.

On the balance sheet it's not an asset until the bill is paid so it goes into receivables.

I think we're both saying similar things just in a different way.

0

Share this post


Link to post
Share on other sites

So much competition out there. Golfsmith and Golf Galaxy and even Dick's in the brick and mortar space plus online like Rockbottom. I dunno about everyone else, but Edwin Watts was way down on my list when looking to buy things golf. Rockbottom is so competitive on pricing, even with the shipping costs. Not surprised this happened.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

So does this mean they'll start selling their inventory for pennies-on-the-dollar to try and sale everything in stores?

It depends on what their intent is.  Chapter 11 is debt re-organization which means they are still in business and seeking protection from their creditors.  In order to stay in business they will have to develop a go forward plan that the bankruptcy court views as viable.  If they can't develop an approved plan or don't wish to remain in business they can proceed to Chapter 7 which is liquidation.

Under Chapter 11 they can close some of their poor performing stores and move any inventory of value to the stores they wish to retain.  The inventory that isn't moved will be sold or returned based on the plan approved by the court.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

So does this mean they'll start selling their inventory for pennies-on-the-dollar to try and sale everything in stores?

I wouldnt hold my breath waiting on that one.

I've seen several large chains file bankruptcy and most of them come out stronger when it is done.

I would imagine that there will be some store closings. There may be some deals at closing stores, but it will more than likely be the garbage that has no value - I am sure the *good* product will be moved to other locations.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

The net gain or loss from the income statement is the operating cash flow on the statement of cash flows.

On the balance sheet it's not an asset until the bill is paid so it goes into receivables.

I think we're both saying similar things just in a different way.

Agreed, most people look at the corporate P&L; to determine EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization.).  The 3Q P&L; would reflect all orders that are delivered as revenue and show the profits from the delivered orders minus costs without concern for which invoices are paid or not.

At the end of the fiscal year, adjustments would be made to the financials to reflect bad debt which would impact P&L;, Balance Sheet and Income Statement.

0

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0



  • Want to join this community?

    We'd love to have you!

    Sign Up
  • 2016 TST Partners

    GAME Golf
    PING Golf
    Lowest Score Wins
  • Posts

    • Right, but then you're just getting into however different people value different things (including money, the performance of their golf clubs, the looks of the golf clubs, the value of a name brand, etc.). People have different values. For something like this, there's rarely any agreement on those, nor is there any "right" or "wrong" answers. I use a set of muscle backs that could just as easily be from the 1950s as now. The tech on those isn't really improving much (though the shafts are undoubtedly much better).
    • We went round and round a bit on this last year, but I don't remember seeing decision 15-3b/1 mentioned.  The difference between this decision and 27/6 seems to be that B's ball is found in a timely manner.  The finding of the "other" ball makes it virtually certain that A's ball was moved by an outside agency (Player B).  In the other thread, B's ball is never found.  27/6 allows the same kind of relief as long as the "other" ball is found within the 5-minute search limit.  As I read the rules and decisions, this is a timing issue,  the rules require a decision to be made within 5 minutes of beginning the search for A's ball.  If the "other ball" isn't found, its presumed lost.   In a way this is somewhat similar to another discussion we had, where a player's ball apparently hit a cart path and went much further than anticipated.  He searched and didn't find it at the expected distance, went back and played another tee shot for the lost ball, and eventually found the original much closer to the green.  He couldn't then put the original into play and "negate" the second tee ball, as he'd already searched for 5 minutes. I don't know if the difference in the timing of the discovery is adequate justification for the different outcomes, but that seems to me to be the defining factor.  It would be interesting to get the take of some of the USGA rules experts on this, not on what the rules say, but on why they draw the distinction.
    • I'd have thought there would be a sliding scale, akin to a volume discount. Not just $x/18 = per-hole cost. Or if there are obvious points where it's not terrible to get back to the clubhouse, make 3-hole, 7-hole, 11-hole, 15-hole, and 18-hole rates. Then you could even consider the par of the holes. Heck, if the course started par 5, 4, 5 I'd be tempted to just play the first three holes three times.  I'd get more for my money than playing holes 4, 5, and 6 which are pars 3, 4, 3.
    • A couple courses around my house, in the fall, will use this promotion.   
    • As straight to the point as always, been one of those days? .  The advances in tech always amaze me in what they can do given the limits set by the rules. Yes, of course there differenced between Acer and Taylormade. One is a comparatively small company and the other is a huge company with enormous R&D budgets. However, speaking from a the average recreational golfers point view im not sure those differnces in performance will be that noticable to the majority.  Sure guys like yourself will be able to notice them as, lets face it, you probably hit more balls with different types/makes of clubs in a year than i will in my whole life. I just wonder how many people use the older stuff and why (other than its cheaper than buying more gear)
  • TST Blog Entries

  • Images

  • Today's Birthdays

    1. bandstan
      bandstan
      (46 years old)
    2. boobiemiles
      boobiemiles
      (25 years old)
    3. ElsieOlson
      ElsieOlson
      (77 years old)
    4. Matt66
      Matt66
      (26 years old)
  • Blog Entries