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Technology Stocks : Cascade Communications (CSCC)
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To: Peter Caradonna who wrote (3523)4/12/1997 7:03:00 PM
From: Dee Jay   of 3743
 
>>What CSCC earns before the merger is irrelevant.<<Not quite, Peter - it is an indication of what Cascade will contribute to the aggregate bottom line - its earnings reflect its revenues minus expenses and both represent areas where the combined company can produce economies of scale.

Call the revenues a starting point for increases as CSCC's products are integrated into the Ascend sales channels where Cascade's products aren't represented much, as in the international markets.

As for expenses, there will be economies represented by overhead reductions - duplicated facilities will be rationalized, functions that can be aggregated or centralized will be over time, etc. etc.

Then there's the prospect of jointly developed products which fulfill a need neither company is presently accomplishing.

So in a roundabout way Cascade's earnings and how they are arrived at do represent an important aspect of the combined companies' bottom line. Just another way of looking at it...

Dee Jay
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