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Technology Stocks : ICO (Inacom) LeadingTech Mgmt Services Co
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To: double-plus-good who wrote (233)7/15/1999 7:39:00 PM
From: Douglas V. Fant   of 274
 
++Good, Gross margins are indeed lower, but they include special charges to inventory writeoffs and the Vanstar acquisition. My guess is that these writeoffs "cleared the air" in terms of profit margins. Toss in inclreasing cash flows from new contracts and this should helkp boostmargins back to usual levels is what I am gamblng....

From ICO's most recent SEC Filing:

(1) Gross margin includes the impact of $86.1 in unusual charges, of which $46.5 million is in products and $39.6 million is in
services. Earnings (loss) before distributions on convertible preferred securities of trust includes the impact of $139.6 million
after tax in restructuring and unusual charges, of which $101.7 million is in products and $37.9 million is in services.

The following table sets forth for the indicated periods the gross margin percentage of the two operating segments and the
consolidated gross margin percentage of the Company.

THIRTEEN WEEKS ENDED
----------------------------
MARCH 27, MARCH 28,
1999 (1) 1998
------------- -------------
Gross margin:
Products............................................................. 3.1% 6.8%
Services............................................................. 14.2 40.0
Consolidated gross margin.......................................... 4.8% 10.9%

(1) Gross margin includes the impact of $86.1 in unusual charges.
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