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Non-Tech : PNEC (Old PLNE) -- Ignore unavailable to you. Want to Upgrade?

To: Ga Bard who wrote (2)	12/10/1999 7:10:00 AM
From: Ga Bard	Read Replies (1) \| Respond to of 101

Strategy/Business Operation The Company's strategy has been to produce compilation CDs containing enhanced or re-digitized master recordings from its existing library, to market them directly through NEOS or other distributors, to contribute these compilation CDs to joint ventures in which the Company is a party, and to license these compilation CDs to third parties for marketing and sale by unaffiliated distributors. To date, however, prior to the Company's acquisition of NEOS, substantially all the Company's revenues had been derived from studio rental sales and licensing royalties and not from the licensing and sale of the Company's compilation CDs. "Rack Jobbing" operations the vendor assumes full responsibility for the customer's display, stocking the display at the customer's location and making the day-to-day decisions as to which inventory to deliver, return and present in the displays. A rack jobber owns the display material or fixtures and is responsible for the proper presentation of goods within the display. The One Stop Business primarily operates as a centralized order fulfillment center for the small to medium sized retail stores, typically record stores, that obtain a variety of recorded music and video. This aspect of the business supplies merchandise based on the orders placed by its customers. The customers in this segment of the business are responsible for the selection of titles and the decisions regarding the return of merchandise. NEOS recognizes sales for its One Stop Business and Rack Business at the time of shipment of products to its customers. All of the NEOS products are sold with a limited right of return by the customer. Generally, in the music distribution industry, wholesalers, such as NEOS, have a limited right of return to the manufacturers. Accordingly, NEOS does not accrue returns and allowances. NEOS, however, reduces net sales by calculating actual returns. NEOS' business, similar to other businesses in the music distribution industry, is highly seasonal where a high proportion of sales occur in the Christmas season but a high amount of returns occur in the months of January through March. We are presently at the time of this post in the amin holiday season. :-) Gary