Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 162.40

+2.9%

Nov 17 3:59 PM EST

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To: Z Analyzer who wrote (8183)	3/28/2000 9:37:00 PM
From: Gus	Read Replies (2) of 9256

Why the disk drive companies are sick and tired of 10-15% Gross Margins with less than 5% Net Margins and moving into NAS/SAN. NTAP's R&D for 1999, 1998 and 1997 was $30.5 million, $16.6 million, and $9.0 million, respectively. By contrast, the European gray market for disk drives in the December quarter was 1-2 million drives or about $100-200 million worth of overcapacity. Network Appliance. YEARS ENDED APRIL 30, 1999 1998 1997 Net Sales 100.0% 100.0% 100.0% Cost of Sales 40.8 40.7 40.8 ------------------------------ Gross Margin 59.2 59.3 59.2 ------------------------------ Operating Expenses: Sales and Marketing 26.1 25.7 26.0 Research and Development 10.5 10.0 9.6 General and Administrative 3.5 3.9 4.4 Purchased In-Process Technology and Related Compensation Charge -- -- 11.3 Litigation Settlement -- -- 4.6 ------------------------------ Total Operating Expenses 40.1 39.6 55.9 ------------------------------ Income From Operations 19.1 19.7 3.3 Other Income, Net 0.6 0.5 1.0 ------------------------------ Income Before Income Taxes 19.7 20.2 4.3 Provision for Income Taxes 7.4 7.6 4.0 ------------------------------ Net Income 12.3% 12.6% 0.3%

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