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Technology Stocks : Identix (IDNX) -- Ignore unavailable to you. Want to Upgrade?

To: David who wrote (4530)	10/28/1997 2:02:00 PM
From: Wendell Holmes	Read Replies (1) \| Respond to of 26039

David, in this case, it's EBDA, with the DA standing for depreciation and amortization. If memory serves, depreciation is applied against the carrying value of long-lived assets, such as buildings and equipment. Amortization is applied against intangibles such as goodwill and I think patents. I doubt that any inventory writedown would be included in either category. The thing about these categories is (unlike legal bills) there is a finite $ amount you can deduct. I'm concerned about the legal reserve. Did the company ever state that in their opinion the cases pending against them were without merit and would be vigorously defended and would have no material impact blah blah blah? This two cents seems pretty material to me. Maybe they haven't lost it yet, and are being prudent, but I find that unusual. It would make sense to reserve if it meant a tax savings, but why do it now if you don't have a tax liability? How much does it help if you later lose the money and say well we've already reserved it? Not much. And if you don't lose it, then nobody gives you credit for earning it when it's recaptured. Just doesn't figure.