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Non-Tech : Iomega Thread without Iomega
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To: Mel Boreham who wrote (7062)2/4/1999 5:57:00 PM
From: HRP  Read Replies (1) of 10072
 
Mel,

Thanks for posting a transcript of Scott Flaig's presentation.

At first blush it is quite positive. However, to me, it presents several concerns regarding constraints.

Flaig cited the following constraints:

1. A media constraint for Zip250. Flaig reported "have both written and handshake agreements of their commitment not only to meet Q1 demand but to exceed it."

2. A ramp up constraint for the click drive. Flaig reported "will have some limited constrains in the 1Q99 time period".

These statements imply that the constraints will be limited to Q199. Sounds good so far.

But then he says "We expect our operating model to hold in 1999, from quarter to quarter may be below or above our model due to seasonality and constraints."

Is seasonality now a potential cause of results below expectations not only for Q1 but for Q2 and Q3 as well?

And, is there currently a possibility that constraints may continue after Q1.

If I owned IOM on the evening of the next conference call, I certainly wouldn't want to hear during that call that Q2 results will be less than expected because of either seasonality or constraints. Could you imagine the opening price for IOM on the next day if the above concerns were not already factored into the price.

My opinion is that a $7.00 price for IOM does not reflect these concerns.

hrp
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