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Non-Tech : Any info about Iomega (IOM)?
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To: macwu who wrote (4618)7/19/1996 1:39:00 AM
From: Young D.T. Nguyen   of 58324
 
Mac (post 4618).

I haven't yet listened to the conf. call, but have read plenty of summaries.

It appears that Jaz is doing great, but there 's a bit of slowdown in
Zip sales over summer months. I have faith that KE and his troops have and
will do the right things to keep thing moving steadily along.

Concering the $4 mils being held over for the rebate. That is an insurance
of nearly 4 cents per shares for profits loss due to rebate on Zip. If this $4 mils
was counted for this quarter, EPS would have been 0.14, a blowout, but
then there 's a risk of disappointment next quarter (0.12 estimate). In additions,
I wonder if KE held over any revenue or shipment from this quarter for next quarter
(I would have.)

Of great interest to me is the increase in R&D spending to 11.5 mils from only 7.0 mils
in 1Q. That 's an increase of 64% (4.5 mils)! That 's another 3.4 cents/share that could
have gone to bottom line. In another world, if R&D stays the same and the $4.0 mils wasn't
held over, EPS would have been 0.17 - a huge blow out. But it is clear that KE and his
IOMG troop are focus on future growth and not pleasing WS shorterm. This is all very
positives for longterm holders.

On slowing Zip sale: Zip sale growth has been at a neck-breaking pace, but now has
achieved a quantity level where seasonality will be a factor from now on. Summer is
always a slow-sale season (unless one happens to do business at the beach), so a
summer slowdown is understandable. Would bother me if demand in X-mas season
does not return to great level.
Young
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