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Technology Stocks : WDC/Sandisk Corporation
WDC 152.88-5.9%Nov 18 3:59 PM EST
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To: Ausdauer who wrote (16211)10/29/2000 9:10:32 AM
From: Zeev Hed  Read Replies (2) of 60323
 
Aus, you could be right, however, I do not think that "deferred revenues" is a P&L statement item, it is solely a "balance sheet item" to accommodate for differences between "cash received" (for instance for long term licensing fees, or maybe even advances against product shipped) that cannot be recognized as "revenues". If as SNDK's 10Q states, retail sales are not recognized as revenues until sold off those shelves, the product on the shelves is carried on the balance sheet as "Inventories" and is recognized at "cost" not selling price. Since "cost" is about 67% of sale price (that is an average, and the cost percentage might be lower when selling to retail), the total inventory on the shelves is not $12 MM but at best $8 MM. This figure is easily "eaxplainable" within the growth of inventories QOQ.

Furthermore, how do we explain the increase of AR by $50 MM in the last quarter when product revenues increased by only $30 MM? DSO went from a very rational 61 days at the end of the June q to almost 80 days at the end of the Sep. q. Currently, the only explanation I have is that some $20 MM in prior sales has not been paid for for more than 90 days. Something does not jive...

Zeev

irrevolute.iuma.com
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