WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 155.45

+3.0%

Nov 25 3:59 PM EST

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To: Ausdauer who wrote (4495)	1/26/1999 12:29:00 AM
From: Daniel Joo	Read Replies (1) of 60323

Hard numbers... Balance Sheet remains strong and is even stronger. Current liabilities are down over $8 million, investment in foundry up $11 million and yet cash position remains basically the same. Cash balance alone covers short-term liabilities. MB shipped increased significantly (number thrown out was 40% higher than any quarter on record) and yet gross margins improved and cost of sales increased only 1.5%. G&A expenses are down 12.2%. Inventories are down significantly - good thing they built inventories last quarter in anticipation of demand. And Royalty revenues look real because deferred revenue amount stayed the same. Negatives - revenue number is down. This is a financially conservative company - interest income is only 1.3% for the quarter - those are terrible returns on cash and short-term investments. They have to invest their money somewhere - preferably in the business. No reason to hold that much in short-term investments that are generating such terrible returns. Investing that money internally or elsewhere to generate better returns is their responsibility to shareholders. I can take that money and invest it in money markets/treasuries and make those kind of numbers. Who is their CFO? He/she is doing a terrible job. If they can't find investment opportunities, the money should be returned to the shareholders in the form of dividends. With demand strong, pricing pressures will ease. It looks like the bad is behind us. Margins will improve significantly. If the stock price declines, I will buy more.

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