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Technology Stocks : Identix (IDNX) -- Ignore unavailable to you. Want to Upgrade?

To: David who wrote (15848)	11/23/1999 5:28:00 PM
From: David	Respond to of 26039

Someone on Yahoo posted recently that H&Q was predicting $7.1M in IT revenues in FY2000, and double that in 2001. I believe H&Q was also projecting losses. How does that happen? If IDX is putting product into channels with very little revenues accruing when the product is first placed, then the steeper the ramp up in orders, the greater the cash flow hole IDX will find itself, until orders start leveling off -- and the company gets swamped with cash. For example, if IDX is getting $2 or $3 only per DFR unit shipped (for the hardware license) and awaiting the remainder upon sale and remittance, it helps explain how a $7M prediction could come true. Say IDX is going to receive another $18 or so in software revenues upon end user remittance and there are 250K units in the pipeline now. If the pipeline 'throughput' is quick enough, we could see $18 * 250K units = $4.5M before fiscal year end . . . and much of the rest could be made up from other sales. The numbers can be off, but you get the point. If channel partners increase and production ramps up, then any IDX selling expenses (minimized, I expect, under the present system) don't get a return on investment until some months later. The steeper the ramp, the greater the apparent disconnect. I'd say we could get an early read on our situation by top line revenues in the next quarter or two, but the situation going forward is clouded by both the new product introduction and the potential for increased channels. (OT) Got the email.