Dave,
There is more discussion on this thread then on the Diamond board!
I saw the same thing on cost of sales as you but I thought the worst management item in the report was:
"Given the supply-demand and pricing dislocations evident during the past six months in the PC and PC semiconductor industries, we decided we needed to move toward a faster "short-cycle" inventory model," said William J. Schroeder, president and chief executive officer. "We took the step of virtually stopping all inventory buys and new production during the first half of our third quarter." ..."the action we took necessarily resulted in the majority of our third quarter revenue being shipped in September. In the end, our operations staff simply did not have enough time to produce and ship against all the orders that our customers had booked in September, and, as a result, our third quarter revenue did not meet our expectations," said Schroeder."
OK. Short cycle inventory is good, but short to the point that you delay everything to the end of the quarter and risk (and lose) shipping orders that are booked. Not good.
Best,
Jim |
