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Technology Stocks : Digital Link (DLNK) Is it just another Comm. stock?
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To: Steve Robinett who wrote (18)12/16/1997 6:47:00 PM
From: Steve Robinett  Read Replies (1) of 38
 
To any DLNK guru: Here's something I genuinely don't understand. This is taken from DLNK's 10Q for the quarter ended 30 Sept 97 (filed 14 Nov 97):

"Narrowband sales in absolute dollars increased 26% and decreased as a percentage of net sales to 52% for the first nine months of 1997 as compared to 59% for the first nine months of 1996. Broadband sales
increased in absolute dollars 65% and increased as a percentage of net sales to 48% for the first nine months of 1997, as compared to 41% for the first nine months of the prior year. The changes in narrowband and broadband sales as a percentage of net sales for the third quarter and first nine months were primarily due to higher sales of narrowband products within the Company's Encore product family and its original equipment manufacturer product. The Company anticipates that its mix of products sold will change to include a higher percentage of narrowband products, which generally have lower gross margins and would therefore adversely affect the Company's overall gross margins."

sec.gov

If narrowband product revenue for nine months only increased 26% and broadband product revenue increased 65%, why is DLNK changing the product mix to include more narrowband, i.e., lower margin products that will "adversely affect the Company's overall gross margins?"
Best
-Steve
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