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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Robert Graham who wrote (9681)	2/23/1998 2:56:00 PM
From: Marq Spencer	Read Replies (5) \| Respond to of 14631

Bob, Investorgal, Jeff, SemiBull: Great discussion! Here are some additional thoughts. In terms of "working the books" (nice phrase, Bob:-), notice that IFMX took approx. 100MM in restructuring charges in Q2 and Q3. Laying off 1000 people costs between 10mm and 20mm. So, they've front-loaded about $80mm of costs into those two quarters. That explains their much lower than expected cost number for Q4. I would expect this artificially deflated cost figure to continue for another couple of quarters (BTW, 10 years ago I used to work at a S/W company that did this and made their subsequent three quarters look really good from a cost perspective. They then repeated the same procedure through another layoff announcement!). The other "unique opportunity" that IFMX had was to restate previous revenues. This, of course, led to moving some revenue into Q4, possibly a little into Q1. My guess is that it will not have much impact on revenues going forward. So, going forward, watch for expenses to slowly edge up. Without another "restructuring" this year Q3 and Q4 expenses would be substantially higher. The question is whether the revenues can increase as well. That's what the IFMX management is hoping for as well. Looking forward, the best I expect is losses in the next two quarters (about -0.10 total) with break even or slightly positive Q3 and a little better Q4 for a break-even year. Note that this the best that I expect IFMX to do. I shouldn't predict the IFMX stock price - the last couple of times I did that, they came painfully true a few months later: Message 1105488 Message 1246055 Now I just write covered calls :-) - Brian.