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

To: Daniel Chisholm who wrote (12681)	11/6/1997 4:45:00 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 18263

Daniel, AR is a serious problem. At this level, it is reasonable to expect a bad-debt write-off in the near future. RE: CASD. Zitel hid the gross margin this quarter, but I'm convinced that the more they sell, the more they lose. In Mr. King's words: CASD "is not a viable business model". IMO, Zitel would survive longer if they discontinued this business area. Regards, Bill

To: Daniel Chisholm who wrote (12681)	11/6/1997 6:59:00 PM
From: doug doan	Read Replies (1) \| Respond to of 18263

I appreciate your well thought out post. 1. I have now made predictions on Zitl earnings for each of the last four quarters and have been consistently wrong. Each time I overestimated earnings and underestimated expenses. CR has the same problem. In this estimate I hoped to take all that into account. 2. Net Sales is based on only a guess that the new acquisisitons are not performing. We saw serious erosion of earnings from date of aquisition till reported earnings on 9/30. In addition the major principals involved in the acquired companies left. Hence I predicted a continuing erosion to $4 million. No Y2K sales. CASD Sales once thought by CEO King "to have more potential than Y2K" look to be dead. They have come out with CASDII but I have not detected and real support. 3. Cost of Goods has always gone up over the last 4 quarters even though sales have dived. This might be the one real legacy of y2k. This is where all the spending on y2k biz shows up. I Just followed the trend. Weird Huh? 4. I bet I got the interest wrong. 5. You are exactly wright IMHO, about the cash. They are burning it quickly and it will soon run out. Keep inmind that they do have the ability to sell 1 million shares anytime they want. Maybe why volume was so high today. I think management has no other choice but to pull the string on those shares right now. Sorry for the bad math, put me down for the double dumb azz award reserved for 4 inch boneheads.