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Forum - View topicNEWS: Funimation's Parent Reports 2Q Sales Down, Profits Up
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darcerin
Posts: 330 |
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I don't pretend to be an economist, but how can their profits be *up* if their sales are down? Don't you profit FROM the sales? *scratching head here*
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Busaiku Chama
Posts: 65 Location: There |
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Sales decreased, but costs decreased even further.
They may have obtained better production/distribution models, labor has become more effective, and so on. |
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batou37
 Posts: 455 |
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I think mostly it has to do with increased gross margins. Here is a very simplified example. If my company sells dvds, and last year I bought each disc for $5 and sold it for $10 I was running at a 50 point profit margin. If this year because of lower sales by the manufacturer I am able to get the discs for $4 and I still sell them for $10 my profit margin has increased. If I sold 1000 discs last year profit would be $5000 and if I sold only 900 this year but at the larger profit margin where my cost was only $4 I made $5400, hence my sales were down (900 this year vs 1000 last year) but my profits were up.
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lhernan02
Posts: 196 |
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Its simple, expenses were cut to overmatch the loss in sales (they did say they shuttered one of their operations). Its an old trick corporate America learned in the 80s: if you need a jump in profit, have an RIF (reduction in force - a type of layoffs with specific rules and benefits), its self defeating if done too often, but most corporations can afford to cut about 20% of the workforce with little effect. Edit: Wow, in the time I wrote this two people beat me to it. Last edited by lhernan02 on Sat Oct 31, 2009 9:11 pm; edited 1 time in total |
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504NOSON2
 Subscriber Posts: 647 Location: Body:Santa Barbara, CA ~ Heart:New Orleans, LA |
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I was thinking the same thing. I guess we non-economic savvy users need it explained to us by all the Masters in Economics holding users like always. |
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vulcanraven01
Posts: 677 |
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FUNi have been cutting down costs (and quality) over the past 6 months, starting with using 2 discs rather than 3 for 13 episode sets, using 4 dics rather than 6 for 26 ep sets, etc...
So while sales are down, profits are up because they've been cutting costs in production. As for them being selective with licenses, why do they continue to license so much crap then? Then should focus on finishing off stuff like Hell Girl and xxxHolic. 
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Dargonxtc
 Posts: 4463 Location: Nc5xd7+ スターダストの海洋 |
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I believe the phrase you are looking for is "I don't pretend to be an accountant". 
If I have a problem with my books, then I am not calling my economist. I'm calling my accountant or chief financial officer. But alas if you knew such a thing you probably wouldn't be asking such a question in the first place, so no harm no foul. No, Funi is a good company. As I was trying to explain when Q1 results came out they had paid off something like 25 million in long term debt. Reducing it by a full 52%. Simply put that means that Funi no longer has to pay huge interest payments. That means their earnings before interest will go up regardless of what is going on in sales. I said it was a good move then, and it looks as if that has been proven correct. Either way, the longer they can bring about positive numbers, the better off they will be when the recession ends in a couple years. |
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pparker
 Posts: 1185 Location: Florida |
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The profit calculations can be very complex, based on accounting practices and tax law. A larger public corporation (stock trades on exchanges) employs an army of accountants just to keep track of the changes and to develop and implement financial strategy. Decisions and actions are precisely timed to keep their numbers looking good, because those numbers drive the stock price, which affects their ability to borrow, bonuses to executives, stock options, etc. The huge financial regulatory structure of the U.S. is purely to keep companies from abusing the process and leveraging loopholes to inflate their stated profits.
This "art" comes to light in crashes like the current one, where what matters is actual cash in the bank, efficient operations and solid sales volumes. It's true, too, about the RIFs. I've seen so much waste in major corporations. Any CEO, if honest, will tell you they could walk through the company any day and cut 15% of the personnel without affecting production or quality (as mentioned, that obviously only works every once in awhile). EDIT: And what Dargonxtc said (who sounds like a stockholder  ).
Last edited by pparker on Sat Oct 31, 2009 9:54 pm; edited 1 time in total |
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jmfsilenthill
 Posts: 1863 Location: Chinese cartoons are srs biz |
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I don't think Funimation licenses that much crap. I wouldn't call it all ground breaking stuff either, but they're obviously doing well for themselves (people are buying it). Dragonaut is probably the worst thing they've licensed (the trailer itself is pretty horrible). Other than that, I can't think of anything they've recently licensed that has been that bad. |
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egoist
 Posts: 7762 |
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Good to see their profits up; sucks to see their quality declining.
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LordRedhand
 Posts: 1472 Location: Middle of Nowhere, Indiana |
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The price of speed and efficiency, be careful what you wish for you might just get it, eh? |
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Otaking09
 Posts: 637 |
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So basically, Funimation is doing well financially in a situation where, ordinarily, most companies with their same selling habits, would be in trouble by now...
Personally, I love the half season release style they've adapted. It's easier to watch eps, you still get some decent extras, it saves up space for shelves and, best of all, you get it that much faster! If I were to think of a bad thing, it would be that they license TOO much anime, TOO fast!!! Picking up the lost Geneon and ADV titles was definately a smart move. I was very happy to learn that they picked up Heat Guy J, Last Exile, and, of course, Gankutsuou. And Air is #8 in my Top 10 list! But licensing Nabari, Bamboo Blade, and some of Gonzo's weaker series was a little puzzling to me. What Funimation should do is what they are doing for Slayers Rev.: Recruit the original English cast, and dub When They Cry 2, and Kyo Kara Moah, and other un-licensed sequels. THAT'LL BE A SURE THING TO MAKE BOTH BILLS AND FANS HAPPY!!! |
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jsevakis
Former ANN Editor in Chief
 Posts: 1684 Location: Los Angeles, CA |
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I don't know what you guys are talking about. The stuff they're releasing today looks WAAAY better than the 4-5 ep discs they were putting out 2 years ago. There's a lot more to DVD compression than how much is on the disc, ya know. |
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Zalis116
Moderator
 Posts: 6868 Location: Kazune City |
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Top Gun
 Posts: 4582 |
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I think Otaking's saying that FUNi should follow the same procedure they're using for the new Slayers series and take on a few other unlicensed sequels. It sounds like he's fully aware of the Slayers cast returning. |
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