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To: Glenn D. Rudolph who wrote (124062)	4/24/2001 5:00:46 PM
From: Glenn D. Rudolph	Respond to of 164684

My error $230 million

To: Glenn D. Rudolph who wrote (124062)	4/24/2001 5:02:48 PM
From: Oeconomicus	Read Replies (2) \| Respond to of 164684

Glenn, it's been a while since I've followed this thread. I commend you for sticking it out. Right on target... meaning? Interesting numbers. Good revenue growth and margin improvement. Cash operating expenses were essentially flat from Q1 last year while revenues grew 22% year over year and gross margins improved significantly. EBITDA loss was under $50 million. Problem is, assuming operating expenses can be held flat again (in absolute dollars), it would take $1.08 billion of sales at a 26% gross margin to break even (EBITDA). That's a 54% increase from Q1 '01. Can gross margins improve enough more to close the gap? Can they pare back operating expenses further without stalling on the top line? Perhaps, like many retailers, they'll make enough each Q4 to more than make up for losses in other quarters. Thoughts? Bob