Going good Mac, welcome back. As you've probably noted that some of the comments are a bit more reserved, somewhat more solid as even a neophyte like me realize the Orwellian implications of being read, and of course everyone wants to know how historical this time next week will be.
Kids in bed, wife asleep, I thought I'd do a bit of research, and besides seeing an ad in today USA Today for Syquest, I got something I asked the folks at Iomega to send. Many of you are probably extremely fluent in all this, but I found a few things extremely interesting as we look toward the future. Taken from the 10-Q report provided to the SEC, here are a few notes after hours:
March '96, "Company reporte record quarterly sales of 222 million with a net income of 10.1 million/.08 per share compared to a net loss in Apr '95 of or .01/share."
"Sales for the three months ended 3/31 increased by 181.9 million, or 453%" over the previous year. Bet you never read that in WJS. "The primary reason for the increase was sales of Zip and Jaz products, which began shipping in Mar 95 and Dec 95, respectively....In the first quarter of 96, sales of Zip and Jaz products accounted for 84% of sales (185 million.) Ditto accounted for 12%....Sales outside the US were 83.9 million" increased significantly over the previous year for the same reason...Zip and Jaz.
"Management expect increased sales of Zip and Jaz and Ditto products through the remainder of 96..." They went on to say that sales might be somewhat restricted due to "the company experiencing some component shortages which may continue to limit production, therefore, sales." What does the rebates tell you Mac? Component shortages fixed!
"The company's gross margin percentage for the 3-month period ended 31 Mar...was due to a shift in product mix from higher margin Benoulli products to lower margin Ditto, Jaz and Zip products. Start-up costs associated with Jaz products also contributed to the decline in gross margin." What this tells me is that this start-up costs will not be factored into the 2Q earnings. Right, Young?
The document went on to say "Gross margin for the remainder of 96 will depend in large part on sales of Zip and Jaz disks, which generate significantly higher gross margins than the corresponding drives, and on the sales mix between disks and drives. Historically the gross margin of Bernoulli products has generally been in excess of 40%; the gross margin of Zip, Jaz, and Ditto product lines have been significantly lower. The company expect the gross margins of Zip and Jaz products to increase as production increases and start-up costs associated with Jaz products decrease, it does not expect them to achieve the (gross margin, my parathensis) levels historically achieved by Bernoulli."
And one last point. R & D was only 3% of sales as compared to 10% the previous year because of the significant increase in sales. Got to have that R & D to stay ahead of the competition, even at WS.
For your examination, and comments. Again, glad you're back. Keep the faith, and good night.
Warmest Regards,
Jeremyles Dad (Jeremy and Myles) |
