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To: Cogito who wrote (8463)	3/23/1999 6:02:00 PM
From: Ken Pomaranski	Read Replies (1) of 10072

<< Where do you get the information that advertising was way down in '98, vs. '97? >> From Iomega's Q4 release: Selling, general & administrative (''SG&A'') expenses were $81.4 million or 16 percent of sales for the fourth quarter of 1998, compared to third quarter 1998 SG&A expense of $72.6 million, or 19 percent of sales. SG&A expenses were down 22 percent when compared with fourth quarter 1997. Research and development expenses of $24 million were flat with both the third quarter of 1998 and the fourth quarter of 1997. Total operating expense of $106 million in the fourth quarter compares to third quarter operating expense of $96 million (excluding purchased in-process technology) and is down 17 percent from $128 million in the fourth quarter of 1997. **** So Q4 1998 had equal revenues, Lower SG&A expenses, same R&D, but ONE HALF the earnings reported Q4 1997. Therefore, one can infer that overall margins are decreasing, meaning that the increase in disk sales are not offsetting the falling ASP of ZIPS. Due to price drops and increasing OEM percentage. QED... kp

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