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Technology Stocks : COMS/USRX

COMS 0.00130

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Nov 4 10:50 AM EST

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To: Price Monger who wrote (1088)	3/26/1997 9:31:00 AM
From: Hassell Anderson	of 1384

PM, Where did you get the 60% 10/100 NIC figure from? I just read the prepared text from the conference call on the COMS home page and came up with a figure closer to 23% (1mm 10/100 units divided by 4.4 mm total NIC units). This would bode very well for next quarter if they kept their margins up with only 23% 10/100 NIC's. I also wanted to get a handle whether they are stuck with a significant inventory of 10M products. I don't think this will be a problem. They had 5.8 inventory turnovers in Q3 and 6.4 in Q2. If we guesstimate that they planned on selling 4mm 10M units in Q3 and figured on 6 inventory turnovers, then they would have had an inventory approximately 667,000 10M NIC units when the price cuts were announced. Since they sold 3.4mm, they would actually have to produce a few million 10M NIC's to meet demand. Assuming a similar scenerio with their systems products, I think an inventory write-down, or further revenue hits for price guarantees shouldn't pose a problem. Does this sound right? Hassell

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