Zitel-ZITL What's Happening Message Board

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Technology Stocks : Zitel-ZITL What's Happening

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To: Michael who wrote (8587)	7/15/1997 1:54:00 AM
From: CalculatedRisk	of 18263

Michael, Why did Zitel consummate the acquisition on June 30, 1997? (Last day of quarter) Because Zitel wants to report consolidated earnings! There are two reasons: 1) Pad the Revenues! The acquisitions provide approximately $3.7M in revenue for the quarter (no profits). Since Zitel's revenues are declining rapidly, this will make the comparison to the previous quarter more palatable. Revenues will increase from $2.7M to $5.0M - WOW! Of course, no real Company would make this comparison, and I'm sure Zitel will not mislead their investors. 2) Disguise the loss! With language about the one-time charge ($0.31 per share), Zitel hopes to hide the fact that their current operations will lose $0.30 per share. Total loss - about $0.61 per share. Regards, Bill

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