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Technology Stocks : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: Troy Shaw who wrote (5523)	2/12/1998 2:55:00 PM
From: SJSharky	Respond to of 7685

Troy-- The problem with the analysis is that scrap and obsolete inventory also go to the cost of sales line item. So if a company had large scrap or took large reserves for excess and obsolete inventory during the quarter, gross margins would look poor. That's why I was curious how they spun the negative gross margin to the analysts. --Ryan All, just how much of a loss does SyQuest sell their drives for?

To: Troy Shaw who wrote (5523)	2/12/1998 3:03:00 PM
From: Michael Coley	Read Replies (2) \| Respond to of 7685

RE: SyQuest Negative Gross Margins Troy, What you're missing is that the cost of goods (per unit) was higher than it will be in future quarters (theoretically) due to ramping costs. They could also gain some efficiency through higher volumes. Unfortunately (for SyQuest) they will probably have the same situation again this quarter due to ramping of Quest and the slow ramp of SparQ. Also, there doesn't seem to be much hope of significantly increased volumes this quarter. From the conference call notes posted earlier, it sounds like SparQ's margins, even if they get the volume and gains that they expect, will be minimal. It certainly sounds like a lose-lose situation to me. - Michael Coley - wwol.com