Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: Sir Auric Goldfinger who wrote (20062)	8/16/2000 1:05:40 PM
From: Rainmaker	Read Replies (1) \| Respond to of 21342

And the rest of the information... Note significant inventory increase in preparation for equipment rollout. That "cash burning" went to equipment ramp-up. It's the same $14M moved from the cash portion to stock/inventory for sales. This is called building to book, followed by equipment delivery. Note A/R. That is money back into the bank at the end of the day. WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS March 31, June 30, 2000 2000 ---------------- ---------------- (unaudited) (in thousands) Current assets: Cash and cash equivalents........................................... $27,258 $12,959 Short term investments.............................................. 1,951 - Accounts receivable (net of allowance of $855,000 and $1,311,000, respectively)....................................................... 42,025 79,878 Inventories......................................................... 30,741 43,398 Prepaid expenses and other current assets........................... 2,200 2,597 Refundable income taxes............................................. 6,222 6,222 Deferred income tax asset........................................... 3,319 3,319 Land and building held for sale..................................... 3,309 3,309 ---------------- ---------------- Total current assets............................................ 117,025 151,682 ---------------- ---------------- Property and equipment: Machinery and equipment............................................. 34,686 36,290 Office, computer and research equipment............................. 18,682 24,479 Leasehold improvements.............................................. 3,436 2,444 ---------------- ---------------- 56,804 63,213 Less accumulated depreciation and amortization...................... 30,435 32,455 ---------------- ---------------- Property and equipment, net........................................ 26,369 30,758 ---------------- ---------------- Goodwill and intangibles, net......................................... 175,482 167,245 Deferred income tax asset and other assets............................ 23,694 22,618 ---------------- ---------------- Total assets.................................................... $ 342,570 $372,303 ================ ================

To: Sir Auric Goldfinger who wrote (20062)	8/16/2000 1:09:54 PM
From: BWAC	Respond to of 21342

You are correct Cash did decrease 14 Million or so. Now can you tell us where it went? Can you explain how it was spent? Can you point out what business functions the cash has been used in? Did anyone invest in WSTL for them to accumulate cash and not use cash to conduct their business plan? Where did the cash go? It was used in operations. Explained as follows: --------------------------------------------- Cash flow was negative $14 Million. What caused that? What business factors led to this? What specific line items may have skewed the result or presented an unclear picture to anyone who just looked at the bottom line? Revenues more than doubled form the March Quarter to the June Quarter. Correspondingly you would expect a large ramp up in Accounts Receivable, Inventory, Account Payable, and quite possibly some sort of purchases of Equipment. All these would effect the final cash flow number until the growth is normalized and leveled off. The increase in Accounts Receivable explained 38 Million of the negative cash flow. Cash hasn't flowed in yet, its still receivable. Get it? Sales just ramped, until payment is received cash is used up. The increase in Inventory explained another 12 Million of the negative cash flow. Sales ramped, ongoing inventory does too. This uses cash, until it is sold. -------------------------------------------------- Again I implore you to seek an accounting degree to supplement your broker designation. It will definitely enhance your understanding of financial statements and allow you to cut through the absolute baloney that posters (such as you) spew forth.

To: Sir Auric Goldfinger who wrote (20062)	8/16/2000 1:11:52 PM
From: Rich Wolf	Read Replies (1) \| Respond to of 21342

Sorry, Auric, WSTL did indeed 'make money.' Their COGS and overhead were less than their revs. As BWAC, Rainmaker, et al. pointed out, the neg cash flow was just receivables, inventory, and some new equipment. They're growing the business, cash outlays will pay back in future Qs. As shareholders, that's what we want them to do with the money. Your implicit claim seems to be that it costs more to make the products than they were sold for. This is incorrect. But you knew that.