Some info from the SEC filings:
Three Months Ended March 31, 1999
Revenue:
Product license $ 33,146
Service and support 14,267
Royalty 4,939
-----------
Total revenue 52,352
Product licenses made up only 63% of sales in March.
If total sales in the last quarter was 71M, and the
percentage was again 63%, than Product licenses
were about 44,7M .
7M of difference would be 16% of sales.
This is not a bit of cheating. This is a mayor problem.
However, I was Y2k manager of a company. There was some
panic, I can imagine they wanted to have stock close to the
customers. But then you don't explain it now as 'side deals'.
I've no investments in lgto, but are interested in the case.
I've seen a lot of arrangements at the end of
month/quarter/year. When things go alright it's tolerated
for many years. Then, when the market goes down,
you can't show nice figures anymore. You start to get
problems with accounts receivable. Then some people have to leave.
My opinion: figures should always reflect reality.
Some managers 'manipulate' the figures to present to
higher levels, but then these higher levels start to
take wrong decisions about capacity etc. In the end
you get a cycle of backorders at one side and high stock
at the other side. Bad capital use.
The worst effect however is that if you show your employees
that you accept cheating to get nice figures, they start to
do the same with you.
Regards,
Pareto |
