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To: JAG who wrote (8993)	1/26/1998 6:35:00 PM
From: Jan A. Van Hummel	Read Replies (1) \| Respond to of 14577

Had expected a loss without the write-offs, so this not too bad. Given the recent fab sale the BV is actually quite a bit higher than the $5 and change. The inventory level seems high indeed. Good question for management to answer. May be an indication of slower sales in Asia or the market in general. Management was right in taking the write-down. Only hope they did all the cutting that needed done. The patent and cross-license deal with CRUS is another indication that management is focused. This bodes well for the future. However, given the crappy hi-tech market and Clinton's no-sex offense doubt we see a real rally very soon. JMHO Jan

To: JAG who wrote (8993)	1/26/1998 6:42:00 PM
From: Ken Muller	Read Replies (2) \| Respond to of 14577

Jag: I am comparing all the numbers from previous statements. There are way too many changes to come to any quick analysis. Pay attention to the "Deferred Revenue" number ($10,921,000). This was $21,760,000 at the end of last quarter. The significance of this number is that it represents the cumulative YTD over-statement of disty shipments. When disty sold the material, the corrections have been made to the revenue, A/R and Inventory accounts. We can see disty got rid of all but $10.9 this last quarter. Since most of the irregular accounting ended at the 2nd quarter, this inventory is now about 6 months old. Therefore, this material will probably be written off next quarter. Ken