copied this off of the street.com
Top Stories: Aiming High, Micron Electronics Guns for Dell
By Suzanne Kapner and Eric Moskowitz
Staff Reporters
6/2/98 7:12 PM ET
In the world of build-to-order PC makers, there is Gateway (GTW:NYSE) and Dell (DELL:Nasdaq), and there is everyone else. One of these also-rans, Micron Electronics (MUEI:Nasdaq), wants to be a contender and its new president and chief operating officer, Joel Kocher, is leading the charge.
Kocher, who spoke at the PaineWebber Growth & Technology conference today, seems to know a lot about the direct model: He spent over seven years as a marketing vice president at Dell before heading to Power Computing, a direct seller of Apple's (AAPL:Nasdaq) Macintosh systems before Apple bought the company last year.
One problem is that the Micron's sales and marketing team, at least when Kocher arrived, was "anemic." Weak execution and uncompetitive pricing on its desktop and notebook lines sent it to its worst quarter in five years.
In Micron's most recent quarter ended in February -- its fiscal year ends in August -- it posted a loss of 25 cents a share, reversing a year-ago profit of 30 cents. Revenue fell to $495 million from $510 million a year earlier and $559 million in the first quarter ended November 1997. Its stock price dropped all the way to 8 1/2 on that news, though it recovered to 16 in late April before settling back to its current price of 10.
Tom Underwood, who with his brother runs the Greenwich, Conn.-based money management firm Underwood Brothers, says there is enough room in the direct-sales model for more players. "The problem that Micron faces is, will small- and mid-size business owners [the market Kocher says the company is trying to capture] look at anything other than a Dell or Gateway? At this point, I would have to say no," says Underwood.
Micron, which was founded in 1995 and was formerly known as Zeos International, is now looking to make a full recovery, which Kocher says will take four to six quarters. The company already has lowered its days' sales of inventory -- the time it takes to get PC materials, put them into place and ship them out -- from the high 30s to "shooting range of Dell," Kocher told TheStreet.com. "We feel we will be competitive again by our fourth quarter or our first quarter."
Underwood says he was impressed with Kocher's turnaround strategy, but is not ready to buy Micron yet: "I want to make sure there's room for them before I invest my client's money
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