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Technology Stocks : Creative Labs (CREAF)
CREAF 0.411+11.2%Dec 8 12:12 PM EST

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To: burn2learn who wrote (7594)12/31/1997 7:34:00 AM
From: Fred Fahmy  Read Replies (1) of 13925
 
mike,

<what would be the effect of slow product movement during christmas to accounting? would it be as simple as high sales recorded for this qtr and a buildup in inventory next? When is a sale, a sale to creaf(when product reaches distribution channel?).>

Generally, revenue is recognized at the time products are shipped. Q2 (this quarter) should do well because of the new products which did require channel filling. Currency should also have helped this quarter as should have Christmas seasonality. Sell-thru will be the real key looking beyond this qarter to 3Q98. Looking forward, I think a key comparison will be next quarter YTY (i.e. 3Q98 vs. 3Q97). That will go a long way in providing the answer to the question "are the new products selling".

I think the recent acquisitions were strategic and will help provide the long term revenue growth investors are seeking. Diversification away from just a sound board company to a major comprehensive multi-media solution provider (i.e. ISA&PCI sound, speakers, video, DVD drives/kits) and focus on significantly expanding distribution beyond just the retail channel to include more OEMs also look like winning strategies to me.

Good luck,

FF
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