To all shareholders of Syquest:
As a shareholder of Syquest, unfortunately, I can not attend the coming annual shareholder meeting(May 6). But I earnestly want those shareholders who can attend to ask the following questions.
(1) How to control operating costs?
In fiscal year 1994, 1995, 1996, the ratio of operating expenses to revenue is 17%, 14.8%, and 25.8% respectively. In the first quarter of 1997, that figure jumped to 34%. How about its competitor Iomega? In the latest quarter of Iomega, that figure is only 19%.
Someone may blame that to the declining revenue in Syquest. But I do not think so. Let's have a close look.
As of Nov.30, 1996, Syquest had 1,904 full-time employees: 209 in R&D, 1,413 in manufacturing, 103 in quality assurance, 74 in marketing, sales, and service, and finally 105 in finance and administration.
How about Iomega? As of March 31, 1997, Iomega had 2,926 fulltime employees: 165 in R&D(that is why Syquest has superior products), 2,257 in manufacturing( Iomega has a revenue six times that of Syquest. What is the hell of going on in Syquest?), 265 in sales, market, and services( that is why Iomega has one of the most sucesseful marketing in recent years), and 239 in general management.
Furthermore, Syquest has three R&D division in Boulder, Campbell, and Fremont. It looks like a multibillion company, doesn't it?
Among thousands of public companies in the states, I wonder how many can match Syquest in expenses? As far as I know, there is none. Only those management team who do not care about shareholders' value can afford that.
I guess that this quarter ended in March 31, 1997, the operating expenses will not be less than 16 million$. With a significant less revenue, the loss is sure to be significantly larger. I guess the loss this quarter is around 12 million$(0.3$ per share). The present managment team should resign if they fail to control cost in the next quarter.
(2)How to boost revenue?
In 1996, Iomega had sold more than 600,000 Jaz drives with a revenue of at least 250 million $. Since Syjet is superior to Jaz both in quality and price(even after the price cut of Jaz), how much revenue Syjet can bring in 1997? We want a clear marketing, sales, and production strategy.
Yours,
Frustrated Shareholdes
P.S
Source: Syquest and Iomgea SEC filings 10K and 10Q of recent quarters. |
