If I were to guess, I bet that CGRM is about to be bitten by the Asian flu, like so many other tech stocks. Here are a few excerpts from their recent annual report:
sec.yahoo.com
Finally, I think that their winter quarter is ending this week (Their quarter runs Nov-Dec-Jan) so we should have earnings out soon.
Export sales were 44%, 30% and 23% of net revenue in fiscal 1997, 1996 and 1995, respectively. In particular, the Company's revenue from the Far East region was approximately $9.2 million, $1.5 million, and $2.7 million for fiscal 1997, 1996 and 1995, respectively.
In addition, beginning in late fiscal 1997, economies throughout the Far East region were negatively affected by devaluations in local currencies. These devaluations caused the relative cost of the Company's products to increase. Moreover, significant uncertainty exists with respect to these economies, which could cause the businesses and governmental agencies to delay or cancel plans to purchase the Company's products. If the Company were to experience a slowdown in sales to this region, the Company's business, financial
condition and results of operations could be materially adversely affected.
Also, it seems that just about every tech company is involved in some type of lawsuit. I doubt that this announcement has anything to do with recent weakness in CGRM , but it is worth noting anyway:
In December 1997, representatives of Lucent Technologies ("Lucent") informed the Company that they believed that the Company's products may infringe upon certain patents issued to Lucent, and that Lucent was seeking compensation for any past infringement by the Company. The Company is in the process of evaluating the assertions of Lucent. Lucent, or any other third party alleging infringement, could seek an injunction prohibiting the Company from selling some or all of its products, which would have an immediate, adverse impact in the Company's business, financial condition and results of operations. There can be no assurance that the Company would prevail in any litigation to enjoin the Company from selling its products on the basis of such alleged infringement, or that the Company would be able to license any valid and infringed patents on reasonable terms, or at all. |
