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

To: marc friedman who wrote (20944)	10/19/2000 5:52:49 PM
From: ELH1006	Read Replies (2) \| Respond to of 21342

Mark, I just took a look at EFNT's report for the quarter and a couple of items stand out. First of all, EFNT's net profit B4 all amortization type charges was $6.1 million and $.10 per share; however this includes $6.9 million of interest income, therefore they actually lost $.8 million and $.01 per share from operations. Conversely, WSTL's comparative number after adding back the interest expense amount of $331K, was a net profit of $814K and $.01 per share. WSTL's numbers are certainly disappointing but EFNT is not exactly setting the world on fire. Secondly, EFNT's marketing/sales expense was 14.4% of revenues vs WSTL's 5.9%. Perhaps WSTL needs to revisit their sales program and this is part of the reason that EFNT sales were up some 24% for the quarter vs. WSTL's decline of 5% (CPE only). The other bothersome point that I noted, besides the obvious, is related to the buildup of their receivable balance. How can the balance be $77.6 million when the quarterly sales were $105.5 million? Are we not selling to credit worthy folks or are these sales basically on consignment? This one puzzles me based on the customer list (Verizon, SBC, etc.). Perhaps WSTL needs to hire a credit manager. Eddie