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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (12268)	10/30/1997 9:46:00 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 18263

Bill, some random thoughts on the most hilarious and hostile conference call I have ever heard! Jack said this and Jack said that... 1. Storage: The more Zitel sells, the more Zitel loses. Although Zitel no longer provides gross margin information for the storage division, we can tell it is terrible from the huge losses. Zitel loses money on every sale, but they make it up on volume. As Jack said about storage: "The business model is not viable". 2. Datametrics / Palmer & Webb: Before the acquisition, these companies' revenues were steady at about $3.3M. The criticism was that Zitel bought a "no growth" business. Under Zitel's brilliant leadership, the revenue dropped to $2.2M for the quarter. No wonder Dr. John Kelly wanted all cash - and then left the company! 3. IBM Royalties: Steady decline to zero. 4. Solution Services Division (Y2K): Not declining to zero ... has always been ZERO! 5. Cash Flow: Zitel used $5.2M in the quarter. At this rate, Zitel will be out of cash in May, '98. 6. Convertible Debentures: Only 150K shares have been converted (about $3M). As the price continues to drop, the dilution will be significant. Best Regards, Bill