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Pastimes : Home on the range where the buffalo roam
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To: stockman_scott who wrote (4412)11/3/2001 12:12:14 PM
From: Zeev Hed  Read Replies (2) of 13815
 
I spent the last half hour studying recent income statements and balance sheet for RBAK, and i cannot understand the bullish case. Could you make the bullish case for me?

Here are my concerns, quarterly revenues are still dropping rapidly, inventories are still at around two quarters of sales, accts receivable are extremely high, and their balance sheet still contains $460 MM of goodwill, which without it would yield a negative book value. Cash is till nice and the only bright spot, but at their current burn rate (and taking into account the huge immediate liabilities that need to be paid in the form of excessive accounts payable), they may actually not be around by this time next year. I expect to see additional write off of inventories, and their break even point even at a 50% gross margin (which they have never had) is in excess of $100 MM per quarter, a tall order from the current (declining) sales rate of $37 MM per quarter.

Can you educate me as to the "light at the end of the tunnel" here?

Zeev
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