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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Michael C. Woodward who wrote (2118)	12/14/1997 2:42:00 AM
From: ForYourEyesOnly	Read Replies (1) \| Respond to of 60323

Thanks Mike, What technical indicators are covered in "trading for a living?" Good luck.... THC

To: Michael C. Woodward who wrote (2118)	12/14/1997 8:24:00 AM
From: Jerome Wittamer	Respond to of 60323

As regards the accounting for revenues thru the retail sales channel, I already posted a while ago how SNDK does it (US GAAP): They have to put the money aside into the deferred revenue section as retailers have the right to give back SanDisk unsold items and be refunded. It can take several quaters before SanDisk fully recognizes its sales depending upon the success of its products and the quality of the channel. =>Message 1665 on Nov 18 : Important remarks relating to recent distribution agreements : As W. Franck taught us, SanDisk is preparing for Xmas and for the demands of the digital age mobile workers : retail sales channel was increased in July when striking a deal with Ingram Micro, today...2000 more stores including CompUSA, Circuit City, Office Depot, Staples, Computer City, Best Buy, Micro Center and Fry's. We should have anticipated this, here's why (from 10-Q) ; this piece of 10Q also informs us on how sales thru these channels impact financial statements : The Company anticipates that a greater proportion of its sales to the consumer electronics market will be made through distributors and to retailers than is the case with the industrial/communications market. This will be particularly true if the level of after-market sales of flash memory products increases. The Company is currently expending significant resources developing a retail sales channel. The expenditures associated with this development are likely to precede the realization of significant sales through this channel. Moreover, the Company has no prior experience in the development or management of the retail channel or sales through such channel. In addition, a significant portion of retail sales for consumer applications will be made to distributors and retail chains, which typically maintain rights to return unsold inventory. As a result, the Company does not expect to recognize revenues on sales to this channel until after the products have been sold to end users. If the Company's retail customers are not successful in this market, there could be substantial product returns to the Company. The inability to successfully develop and effectively manage the retail sales channel could have a material adverse effect on the Company's business, financial condition and results of operations. =>As regards the deferred revenues in the BS as at 9/30/97 here's what I posted on Nov 1 : Deferred revenues grew from $5,6M as at Sep 30, 1996 to $32M as at Sep 30, 1997. An increase of 570%!!!! 10Q : 'Out of that, $26.3 million came primarily from the receipt of funds under patent license and royalty agreements. (...) The Company has adopted a strategy of cross-licensing its patents to other manufacturers of flash products. Under such arrangements, the Company earns license fees and royalties on terms that are individually negotiated. The timing of recognition of revenues from these payments depends on the terms of each contract, and, in some cases, on the timing of product shipments by the third parties. As a result, license and royalty revenue has fluctuated significantly in the past and is likely to continue to fluctuate in the future." Conclusion : IMHO, before asking questions to the Co I think we should check whether we do not already have the answers, especially if it has been posted on this thread. And in this case I know the question of deferred revenues has been asked twice to the company by people in this thread. We should try to be more focused, it will help with our relation with the company. Mike this is not an attack directed at you nor at anyother one here, this is my humble opinion which applies to me as well. Best Regards, Jerome