Just another YAHOO board refugee.
I've posted occasionally on the Yahoo INPR board for a little over a year, but it's become such a circus full of utterly useless hype and slamming that I can't take it anymore. So I'm coming here in the hopes of finding a refuge where there's less posts, but more useful content.
The quarter numbers were below the wild expectations of the dreamers, but they were right in line with the guidance INPR has been giving so the revenue and earnings shouldn't have been a surprise. The revenue was a little below what I expected, and the earnings was just about where I thought it would hit.
There was one surprise, and that was the writedowns. I've been pondering that, and I was disappointed there were no able analysts on the conference call to ask the right questions about that. Here's my take. I think Dale & Co. are using the last quarter as the sacrificial lamb in a fiscal year that was doomed from the start, thanks to Del. I think they used the quarter to clean all the junk off the books so they will be in a better position to actually turn a profit in 2000.
The most significan writedown, and the puzzling one is the real estate. I think what they did was writedown the value of the unused portion of the Borland campus. It's no secret that a large part of the campus lies empty. In effect, they took years of future depreciation in a single transaction. This will reduce the rather sizable quarterly depreciation figure which is too large given the actual size of Inprise staff in that building, making it that much easier to show a profit. If that's the case, I think it should not be looked on as a bad thing. I expect the property already was carried on the books below market value. Now it will be carried even farther below market value. Even though that $29 million is off the asset column, I believe the value still exists. It didn't just evaporate. And the writedown may now help offset the sizable gain on the Microsoft income that they would otherwise had to have paid.
An important clue to this is the fact that INPR was cash flow neutral last quarter, and cash flow has further improved to the point where they are cash flow positive. This is key, and insures INPR has the breathing room to continue the fight back to revenue growth and earnings growth.
These are just my opinions though. I hope the company will elaborate on this real estate issue further. |
