Copyright ©​ Daniel Cullinane CPA.

​Just as Papa John’s International Inc. (NASDAQ: PZZA) offered financial assistance to some of its retailers, the head of its franchise association hammered founder John Schnatter and aggressively stated it is time for him to go.

Papa John’s said it would reduce franchise fees and lower the price of food it supplies to its stores. It will even offer some loans. Falling sales and a dispute between Schnatter and the company’s board have caused chaos at the company and presumably have hurt sales further. Schnatter, who was board chair until recently, made racially charged remarks that led to his resignation. He is working to get the chairman’s job back.

The franchises have sided with the board, at least in their desire to see Schnatter go away. Papa John’s Franchise Association’s president, Vaughn Frey, said in a press release:

We believe it is time for the founder to move on. Steve is pursuing the right initiatives to reinvigorate growth and recognizes the importance of working together to move forward successfully. We appreciate the assistance being extended to our franchisees and believe the assistance program will help mitigate the impact that the founder’s inexcusable words and actions have had on franchisees.

In other words, please leave before you destroy the company, and along with it our franchises.

The risk the franchises take is that they are pouring gasoline on an already raging fire, adding one more factor to the war between Schnatter and Papa John’s that could undermine further both consumer and shareholder views of the company. On the other hand, some already are sinking and may believe they have no other recourse.

​When Inc. (NASDAQ: AMZN) initiated its Prime Air cargo service, it contracted with two existing cargo carriers to supply both the planes and all the pilots, training, crews, and maintenance for the service. The contract carriers, however, are having a difficult time meeting the initial goal of having 40 Prime Air planes in the air by 2018.

Pilots who fly for the two airlines plan to hold a protest at Amazon’s Seattle headquarters on Tuesday calling attention to staffing shortages.

Amazon leased 40 planes from Air Transport Services Group Inc. (NASDAQ: ATSG) and Atlas Air Worldwide Holdings Inc. (NASDAQ: AAWW). Each carrier is supplying 20 Boeing jets to Prime Air.

A long-time Atlas pilot, Capt. Robert Kirchner, said:

Prime Air pilots are taking our concerns about staffing shortages at our carriers to Amazon executives because we want Prime Air to succeed.We are losing a record number of pilots at an unsustainable rate due to sub-standard pay and benefits, and unless something is done to tackle these issues, the future of Prime Air is at stake. Our airlines are playing with fire by undercutting pilot standards at a time when the country faces an unprecedented pilot shortage, and we hope Amazon will tell our airlines it’s time to get serious about working with us to resolve the staffing crisis and protect their new business venture.

According to a press release from the Airline Professionals Association, Teamsters Local 1224, representing pilots and crew at 11 U.S. airlines, conditions at Atlas Air “could undermine the carrier’s commitments to Amazon:

Since the start of the year, Atlas’ efforts to hire more pilots have come up alarmingly short – though it has hired approximately 180 pilots thus far in 2017, the company has lost more than 100 pilots in the same period. Atlas has seen nearly as many pilots leave the company in the first half of this year as it did in all of 2016.

The industry as a whole is suffering a severe shortage of pilots and the pilots say that the Prime Air contracted carriers are taking on the work despite known staffing, attrition, and retention problems, and these issues will only get worse.



​July was not kind to U.S. automakers, who saw sales fall year over year in the month by some serious numbers. Ford Motor Co. (NYSE: F) posted a drop of 7.5%, and it was the best performer among the Detroit Three carmakers.

General Motors Co. (NYSE: GM) posted the largest decline — 15.4% — and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) saw sales shrink 10% year over year.

The biggest problem continues to be sales declines in passenger cars, as sport utility vehicles (SUVs) and crossovers remain the favorites among U.S. drivers, but some SUVs and crossovers also saw lower sales volumes.

Before we look at July’s worst-selling cars, we should note that sales of GM and Chevy pickup trucks also declined in July, while Ford’s F-Series saw sales rise 5.8% and Ram pickup sales were flat. Sales of SUVs and crossovers were marginally better: Ford’s SUV sales rose 2.9%; GM’s best performer — the Chevy Equinox — posted a year-over-year boost of 7.5%; and FCA’s Jeep Grand Cherokee model saw a sales rise of 14% year over year.

Honda Motor Co. Ltd. (NYSE: HMC) reported that July car sales rose 1.9% year over year in July, with sales of Honda models up 2.8% and sales of Acura models down 12.2%. Toyota Motor Corp. (NYSE: TM) reported a 3.6% increase in sales in both its Toyota models and its Lexus models.

Volkswagen reported U.S. July sales were down 5.8% year over year, with a 3.5% drop in its best-selling Jetta and a sharp drop in sales of its Passat model the chief culprits.

Here are the 10 models with the biggest year-over-year July unit volume declines, excluding models that are being discontinued:

Buick LaCrosse: down 56.4%
Ford Fusion: down 42.2%
Cadillac CTS: down 40.1%
Chevy Impala: down 39.9%
Ford Mustang: down 35.1%
Volkswagen Passat: down 21.5%
Toyota Corolla sedan: down 16.1%
Ford Fiesta: down 12.5%
Honda CR-V: down 11.8%
Chevy Malibu: down 10.8%


The already dire crisis in Venezuela will grow worse in coming months. President Nicolas Maduro's recent actions including a planned power grab to rewrite  the constitution in his favor are sparking an uproar from his opponents. If the opposition get violent, Maduro will crack down even harder to protect his post. A White House threat of more ecdonomic sanctions will not work to force Maduro to change course. Plus, it could hurt citizens by  further depleting the country's coffers. Deteriorating economic conditions will push millions to flee Venezuela to escape devastating food shortages, crime and disease. Budgeet deficits will mount as the oil dependent nation deals with low oil prices and historically low production. A recovery can not begin until Maduro exits. That is not likely anytime soon. He still has the backing of the military and police, paid for with bribes and immunity. The International community may have to prepare for the worst: Civil War

Tech firms dong business in Europe are bracing for a new privacy rule, the European Union's General Data Protection Regulation, set to start in May 2018. In the name of the consumer privacy, companies will face strict, detailed data rules, such as having to report breaches with in 72 hours of discovery. Sales of digital security products will kick into higher gear in EU countries as businesses beef up encryption, antivirus protection and other security defenses. The goal: Avoiding fines of up to 4% of yearly  sales ire 20 million euros for violations Firms are also hiring tens of thousands of privacy officers for newly mandated roles


Daniel Cullinane CPA

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Daniel Cullinane CPA

2500 Plaza 5 25th fl  Jersey City NJ 07311                                                          phone 732-516-1648  fax 732-516-9778

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South Korean President Moon Jae-in was elected in part on promises to extend an olive branch to North Korea and put the brakes on the installation of a controversial US missile defense system.  Less than three months into office Mr Moon has been forced to rethink that approach after North Korea test launched its first two intercontinental ballistic missiles. On Sunday, South Korea's defense minister daid the country would upgrade its Patriot missile system in response to North Korea's second ICBM test launch late Friday

The decision came a day after Mr Moon  said he would weigh further deployment of a separate longer range missile defense system callled Terminal High Altitude Area Defense. Mr Moon had suspended Thaad's deployment this year as one of his first acts in office on concerns that it had been pushed through by his unpopular predecessor without proper public consultation. While Thaad is meatn to defend the Korean Peninsula feom shorter range missiles, not an ICBM that would be capable of reaching the continental US - Mr Moon pursuit of beefed up military capacities reflects broader regionl concerns about Washington's commitment to defending its regional allies as the US homeland comes under threat. China, which strongly opposes the Thaad deployment warned on Saturday that the deployment  of further Thaad components gravely damages strategic balance in the region and harms national security interests of countries in the area including China

​When FireEye Inc. (NASDAQ: FEYE) reported its most recent quarterly results late on Tuesday, the cybersecurity company said that it had a net loss of $0.04 per share and $185.5 million in revenue. That compared with Thomson Reuters consensus estimates that called for a net loss of $0.12 per share and revenue of $176.43 million. The second quarter of last year reportedly had a net loss of $0.33 per share and $175.04 million in revenue.

During this quarter, billings decreased 12% year over year to $172.0 million, which was near the high end of the guidance range of $155 million to $175 million.

In terms of guidance for the third quarter, the company expects to see a net loss in the range of $0.06 to $0.09 per share on total revenues of $183 million to $189 million and billings in the range of $190 million to $205 million.

The consensus estimates are a net loss of $0.08 per share and $186.06 million in revenue.

Cash flow from operations was −$11.5 million, which was better than the guidance range of −$17 million to −$27 million. On the books, FireEye cash, cash equivalents and short-term investments totaled $870.8 million at the end of the quarter, down from $935.7 million at the end of the previous fiscal year.

Kevin Mandia, FireEye CEO, commented:

We executed well against our priorities in the second quarter, delivering billings, revenue, earnings per share and operating cash flow above expectations. We have made great progress rationalizing our cost structure, and reduced our operating losses by more than $100 million in the first six months of the year compared to the first six months of 2016. As we look forward to the second half of 2017, we are focused on new opportunities to expand our customer base with our Helix platform, our next generation endpoint protection, and innovations in our network and email security solutions.

Shares of FireEye traded up almost 8% at $15.85 just after the opening bell on Wednesday. The consensus analyst price target is $15.16 and a 52-week trading range is $10.35 to $17.70.