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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology

EDIG 0.0001000

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Mar 20 5:00 PM EST

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To: JimC1997 who wrote (15498)	10/21/2000 5:29:03 PM
From: ekn	Read Replies (1) of 18366

>>>>>>>>> I don't own any Lanier. I wish good fortune to those who do, but I fail to see the relevance of your comments about that stock. By: JimC1997 $$$$ Reply To: 206 by rootus $$$$ Thursday, 16 Mar 2000 at 1:03 AM EST Post # of 924 Hi Rootus & Hail, Yes I have a position in Lanier, much of which I picked up the other morning at 1 5/8. My concerns on this company relate to the high debt load that Harris spun the company off with. A rough guess is that there is about $800 million of debt to go along with less than $200 million of equity. Given the apparent drop in earnings that the company foresees, this may put Lanier at risk of a loan covenant default. Another red flag is the comment in the press release about the expected earnings "before any charges". You can be assured that when a company uses such language in a forward looking statement, there are write-offs being contemplated. Couple that with the long list of "strategic initiatives", most of which seem to involve paring down the company, and the prospect is a near certainty. Write-offs would likely eliminate any earnings for the company this year, but would clear the decks for a recovery next year. Management may feel that since the earnings targets cannot be met, that setting up the balance sheet for a strong 2001 recovery should be the top priority. Write-offs could trigger a loan covenant default, but the lenders would probably waive the default if the business plan seemed reasonable. I may call Lanier's treasurer tomorrow (if I get a chance) and go over their capital structure with him/her. Overall, it looks to be an undervalued security, but a perceived risk of loan defaults can hold down a stock price to very low levels for a long time. JimC No problem with the company picnic jimbo, they show they have the ability to execute a well cooked hot dog! as far as correlating that to business i don't.

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