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Technology Stocks : Micron Electronics (MUEI) -- Ignore unavailable to you. Want to Upgrade?

To: joshi who wrote (2639)	12/15/1997 9:42:00 PM
From: joshi	Read Replies (2) \| Respond to of 4074

For thoes interested, the spin was positive. MUEI took a 20 mill writedown of inventories in the quarter. The also spent millions on advertising(didnt give a number) but did say that thoes expenses should be slightly above 4Q96 numbers. A significant improvement. They also sait that while the PC over inventory has been worked thru, there is still a overinventoy in the laptops. It will be worker thru in the 2Q98. Also good news. The netfrane costs increased by 1/3. this was cost of production. New computer plant will be up by end of 2Q98. Ad camp. went well and is providing increased brand recognition. So far this quarter, sales are "meeting" the officers "expectations". Biggest item "point" was the CSP "component Sales Price". Prices have been dropping. Unfortunatly, the company bought the components for the machines prior to the component price dropoff causing compnent writdowns(charge above). They are resolving this problem by getting suppliers to move closer to their plant allowing a lower inventory level but still allowing quik customer turnaround. I think if this stock drops tom it will be a "GREAT" buying opportunity. I would not be supprised if it went up. Good luck all P.S. sorry for spelling, I cant type well

To: joshi who wrote (2639)	12/15/1997 10:38:00 PM
From: jgercke	Read Replies (3) \| Respond to of 4074

Some points from conference call: 1.) Notebook sales up 45% over prior quarter (not year over year, but sequentially). Company expects notebook inventory problem to be resolved during the current quarter and not continue into the next quarter. 2.) Advertising expenses should recede from current high level (not quantified) to historical norm. 3) Servers increased from 1.5% sales to 4.0% 4) Writedown of inventory during current quarter was approximately 20million. This was not taken as a special charge but was reflected in cost of goods sold. An important point, because had the company elected to treat this writedown as a non-recurring charge then operating earnings would have been higher by 20million. 5) Company expects to offset decline in ASP (average selling price) by improved product mix from their nascent enterprise division and high end boxes. 6) CFO characterized the company balance sheet as strong and noted that no borrowings had occurred during the quarter in the companys 135 million credit facility. Overall impression was that management was being restrained in its predictions but thought that their dog would hunt. I think they might have been able to get away with a non recurring charge of 20million and have shown earnings of .20 per share or so, but they decided not to do that. I'm sorta glad they did it that way. When questioned about their ad campaign they indicated that their primary goal was to increase brand awareness, which they were satisfied it had done. Plant in Napa, Idaho should be on line in Q2. When asked about predictions for margins returning to historical levels, they were cautious, and said they would do what they had to do to be competitive in the marketplace. Current component costs are coming down and should "theoretically" (their word) allow margin improvement, but I got the sense they wanted share also and would fight to keep it. Sounded almost liked Ekhardt Pfeiffer, or whatever his name is at CPQ :>