Joseph I'm confused about the point you were attempting to make referencing R&D expenses.
For the 3 months ending 9/30/97, R&D expenses were $1,209,000 which was only $4,000 less than the same period a year ago. For the nine month period ending 9/30/97, R&D expenses were $2,525,000 which was $490,000 less than the same period a year ago.
If you compare the R&D expenses from Q3 97 in relation to the total spent in the first nine months, you will notice that Q3 R&D represents nearly half the total year to date. From what I can recall, historically the majority of Spectrum's R&D spending does in fact occur in the 2nd half of the year.
You also expressed a concern about gross margins. As we all know by now, SSPIF has been phasing out low margin Desktop CT business, and placing more of an emphasis on higher margin DSP systems business. As a result of that shift in business concentration, gross margins for Q3 97 were 55%, compared to 48% in the same period a year ago. Since gross margins are increasing, here too, I am confused about your concerns. |
