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

To: LemurHouse who wrote (3289)	2/2/2001 10:22:00 AM
From: Ian@SI	Read Replies (1) \| Respond to of 3661

Normally, accounting principles as well as practices encouraged a company to report cost of goods sold in the same period as the revenues are realized. From what I've heard in the conference calls, I've got the impression that the costs are now being reported as incurred; whereas the revenues are realized only after customer acceptance especially for new products where acceptance might be in doubt. In an age of short life cycles or rapid obsolescence, this might actually make some sense. For this sector, where the products are always evolving, it's going to take some getting used to. One last comment on Steag: It seems to be common practice when a company sells one of its divisions to put on a major sales drive to get every last $ of revenue out of that part of the company before it leaves. My guess is Steag did exactly that and probably quite successfully. With the abnormal treatment of AR contractually committed in the purchase agreement, my guess is that Steag Officers didn't communicate the clause to the Sales force; that normal payment terms were negotiated; and, the Sales and Accounts Receivable business functions didn't realize that they had to collect all receivables prior to Jan 2nd closing date or Steag would just give MTSN the gift which it actually did. So this strikes me as an out and out windfall. Steag parent has probably paid the suppliers for components and inventory delivered, incurred costs of sales; then sent the AR to MTSN with the division. I guess those negotiating the sale didn't adapt to the business processes imposed by SAP. In any case, we should thank Steag for essentially giving us the business for free; adding about $6/share book value over what would otherwise have been. As long as Steag holds its MTSN shares for more than a couple days, they're likely to do very well all the same. Regards, Ian.