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Technology Stocks : Network Associates (NET)

NET 228.47

-1.9%

3:59 PM EST

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To: Edwarda who wrote (5805)	11/3/1999 3:28:00 PM
From: Chuzzlewit	Read Replies (1) of 6021

Well,Edwarda, it's cash flow time! Here's my analysis of NETA's operating cash flow over the last quarter: Operating cash flow: Operating earnings as reported: <$828> plus non-cash charges 10,627* ------- EBITDA 9,799 Changes in B/S items: decrease in A/R 8,565 decrease in other current assets 16,243 decrease in A/P <12,854> decrease in accrued liabilities <4,956> decrease in deferred revenues <35,276> ** ----------------------------------------- Operating Cash Flow <$18,479> ========= Comments: * I calculate that approximately $8.6MM is due to repricing stock options ** Very troubling because it means that at least $35 MM of reported revenue came from deferred revenues. This strongly supports your contention that NETA is mostly in the channel! TTFN, CTC

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