> NTAP's excuses as to the higher non cash current assets are the classic
> excuses--component shortages, higher international sales, and back-end
> loaded sales. If you go back to when LU's balance sheet began to implode,
> they used these exact excuses. Go back to last quarter with CSCO, when
> they used component shortages as the excuse for higher inventory, and are
> talking now about higher international sales.
>
> Sometimes the excuse is indeed valid, but usually they are just excuses.
See: ntap.com
Click on the "Financial Overview", Section 2, of the conference call.
On "Play" from top bar of Real Player, you can click on
"seek to position". Put in 6 minutes 10 seconds, where the DSO
portion of the call starts, and click on "seek".
Jeff Allen, the CFO says that DSO (Days Sales Outstanding) was
70 days, their last quarter was 57 days, their target is 50-60
days. So, it is 13 days higher.
He attributes the 13 days to:
1. Part shortages early in the quarter and uneven demand at the
end of the quarter due to IT budgets being slow to release. He
says this contributed 6 days to DSO.
2. International mix of revenue is up due to US IT spending
budget cycles being slower to close in January. He says this
contributed 3 days.
3. They have an annual year-end renewal for service/support
contracts where revenue is deferred adding to accounts receivable,
they had the same affect last fiscal year's Q3. He says this
contributed 4 days.
The difference in DSO from Q2 to Q3 was 13 days, 6+3+4 = 13.
Listen to the conference call (I gave you a way to just skip to
the DSO argument to save time) and make your own judgement. |
