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Technology Stocks : DIGL... Digital Lightwave.... Making Waves....
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To: Milkman who wrote (256)1/16/1998 9:57:00 PM
From: squirrel  Read Replies (2) of 934
 
Milkman and Mahesh,

Thanks for your responses.

It's evident I am going to have to be certain to review the old postings before broadcasting a question. I should have seen your earlier posting, Mahesh. Based on your comments, it would be fair to say that DIGL has an IMPRESSIVE product. Does this mean they are in a position to 'set the standard' for this type of product?

The remark regarding the bump in gross margin percentage was intended to draw attention to a positive circumstance - excellent top line growth, excellent gross margin growth in dollars, and an increased ratio of gross margin to sales of 67%. That's heads above a lot of other 'up and comers' that get plenty of revenue growth, but are still trying to pull themselves out of the red.

Milkman, with your posting, we have all been advised that OEM sales are being sought. That means a drop in gross margin percentage, but it will be more than offset by an increase in bottom line dollars. The drop in gross margin percentage is planned, but it will mean more profit in dollars for DIGL and its shareholders.

The comment about SG&A dropping as percent of sales was also intended to highlight the positive fact that the additional revenue was the result of effectively managed overhead. How many times have you seen the percentage growth in revenue of some 'up and comer' exceeded by the percentage growth in SG&A?

I still have a question as to why receivables at the end of Q3 were at the levels reported. An obvious speculation would be an extension of terms . . . say to 90 days . . . coupled with delayed payment by some customer(s). If this speculation is fairly close to the facts, I would consider all this as something of an irritant to the longs rather than as fuel for the shorts. Surely somebody can explain why all this balance sheet stuff makes sense as reported and does not really need questioning.

Again, I appreciate the responses; and starting tomorrow I am going to read all the old postings.

squirrel
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