Hey, Thanks so much. I will give that a try. Geoff

Im usually drafting in Word then copying and pasting. Is there a better way?

I still have some problems with the new typepad. A lot of times the page is slow to load and gets hung on images from prior posts. Also when I copy and paste text into a new post it never quite comes out right and requires a lot of editing. If I have to make a backspace or delete I usually have to start my re-edits over from scratch. I have been using the old interface to compose posts because it seems to give me less grief.

If you look at the past two fiscal years, net non-cash working capital is not significant, fluctuating in a range of -2 million to + 2 million. Essentially the $20 million of inventory, receivables and prepaids is offset by payables of similar magnitude.

Hi Wood, Sometimes in the past I have posted my modelling. I might do that this weekend. In the meantime however, I am forecasting 2009 FY sales of C$136. million and EBITDA of $8.0 million. From the $8.0 million EBITDA, I subtract zero interest, cash taxes estimated at $1.2 million, expansion in net working capital estimated at $0.0 million, and capital expenditures of $1.0 million for a Free Cash Flow run-rate of $5.8 million. I might as well also elaborate here on the "free cash flow yield is approaching 10%." At $1.25 share price, the market capitalization of Coastal is $72.3 million. From that total, I net out the $14.0 million cash balance that Coastal reported on July 31, to give me an Enterprise Value of $58.4 million. If you divide the unlevered Free Cash Flow into the Enterprise Value you get a FCF yield of 9.9%, which in my books is "approaching" 10%. Note that Coastal's free cash flow yield is much higher than the free cash yields on a wide variety of "income trusts" from the past five years that actually paid out a distribution much higher than that by borrowing cash to fund distibutions. NOT That I am encouraging management to pay the cash out. These days building a war chest is a pretty sound strategy.

Hi VG, Thanks for the question. With respect to barriers to entry on CC, I actually believe they are quite strong. First time online contact lens buyers may shop based on web search, but this business has a very high re-order rate, which means that a big customer list is a really stong competitive asset. A second barrier to entry relates to certain industry specific scale economies. The first is purchasing power vis-a-vis the large suppliers like Ciba Vision. Leaders in this business will buy at lower costs than start-ups. Moreover numerous fixed costs relate to specific countries. If you need to pay Google for search priority, that is a fixed cost that tracks to a country. If you need to have a legal department to stickhandle through the regulatory roadblocks that optician colleges will try to establish, that is a fixed cost. So you can see how a market leader in online contacts retail can have a significant profitability advantage over new entrants. Successful leaders in this situation typically re-invest a portion of their excess profits in price reductions that further accentuate their relative advantage. As for discount rate, I wouldn't differentiate between Coastal and a large cap. If you ask me, Bank of Nova Scotia ought to be tagged with a 25% discount rate and Coastal with only 10% because the relative risks are far more significant in the former than the latter. GC

Hi Stephen, For easy stats without having to do too much work, go to www.quantcast.com and just enter your website's URL on their bar. You can also discover traffic and patterns for some larger related sites. GC

1. Canadian 2. Between-gigs investment fund manager and blogger (www.marketdepth.typepad.com) 3. MBA, and a bit of a self-taught economist, although my last official economics course was econ 100 at UBC 4. Just discovered this blog today. Very good depth. The internet doesn't have much good Canadian economic commentary and this site is a standout imo. I like the use of data and the depth and quality of the discussion of each post.