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Technology Stocks : Adaptec (ADPT)

ADPT 16.42

-1.4%

3:59 PM EST

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To: Gary Burton who wrote (3116)	7/23/1998 9:52:00 PM
From: Starowl	Read Replies (2) of 5944

A rough cut at the CC: Gross margins at (decline) 56% for the quarter. Cash at $682 million despite spending $21M for the Symbios adventure and $32M for (?). The RIF at the Singapore plant reduces it to one shift. Further RIFs are not in the plan right now. Saviers apologized for the "unacceptible" performance and reaffirmed long-term confidence in the core business, primarily in the server market, in leading SCSI forward to Ultra3 and also to lead in Fibre Channel (Opr sys and interoperability: new products to be announced next quarter), RAID controllers and software. He sees little improvement in the business conditions for the current quarter and will be taking extraordinary actions to reduce inventory--correction on the order of "several weeks" (have approx 5 1/2 weeks of it now but noted it isn't that perishable)--says it will be difficult to be profitable in this quarter. Goal of reducing oper expenses to or below the 35% level. This came up several times. Share count is 114M for the quarter. In 3rd quarter looking for continued ramp of Ultra2 with high ASP. Bob Graham, head of the Storage Systems Division, said there are good products in line and that there would be product announcements in the Aug-Sep timeframe. Just listening to the farewells to Hansen and O'meara, it would appear Hansen's was in the works for some time, but I didn't get that feeling with the latter's. Bottom line: Things can only get better but not until after this quarter. The warning for this quarter has been issued already. But you can bet the company will work hard not to record a loss per share. Expect more strategic acquisitions. Baldy can back up his truck, I suppose. But I won't be loading it with my shares. Starowl

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