Ampex Corp: Digital Storage Message Board

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Technology Stocks : Ampex Corp: Digital Storage

AMPX 11.28

-3.8%

Nov 14 9:30 AM EST

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To: Bruce Bacon who wrote (2339)	3/18/1997 2:11:00 PM
From: Bruce Bacon	of 3256

I called Karen at IR today and asked her if she could shed some light on how much they intended to increase R&D spending this year. I referenced the prior 3 years spending which averages out to about 16.7 million a year and the statement made in the latest 10-K about increasing it above those levels this year to support the KM program. Karen said she did not know how much the increase would be and said it could take the form of adding more people for development, equipment for testing, or other forms so it is not something she can specify. I mentioned the Zacks EPS estimate of 0.57 for 97 and asked if she could comment and she said she did not know where they get those estimates. I told her my concern was that a significant increase in R&D would affect the EPS. She also pointed out the extra one time expenses affecting last years earnings and that they would not be a factor this year, suggesting that they would have more to work with for R&D. She also commented that as a company they need to concern themselves first with progressing the company and that earnings estimates would take a second place. I had to agree of course. That is the right way to do things, still I dont feel any smarter regarding a guess at how this might affect short term earnings. Oh well. I also pointed out the decline in order backlog from 19.1 million in Dec 94, to 13.8 million in Dec 95, to 3.4 million in Dec 96 and told her I found it curious that backlog while the backlog declines they seem to overcome it just fine with increased sales. I asked her if she could shed any light on that and she said that I answered my own question, that they did overcome it. I remarked that it must put more pressure to achieve same quarter sales and she said that was correct but that they were doing that. Again, I dont feel much smarter but I guess the proof is in the result and it is not a problem. I also asked her about the Mitsu lawsuit. She said that the lawsuit AXC has against Mitsu is scheduled to start in Delaware on March 31 ( of course that can change ). She said that the countersuit Mitsu filed against AXC has been taking place in LA for three weeks now and should be concluded by the end of this week. I asked her why the countersuit came first and she said it was just due to jurisdiction / scheduling reasons. I then asked her if they intend to issue a press release when the LA trial is finished to advise the result, one way or another. She said that has not been decided yet. They are considering it. She added that the one scheduled to start on the 31st is the real important one and that even if they were to loose this one it does not necessarily mean the Delaware trial would have the same result. Since Ampex has not decided if they will issue a press release regarding the trial result this week, does anyone know a web site that might post the result? Bruce

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