Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Marq Spencer who wrote (10193)	4/7/1998 1:54:00 PM
From: Mark Finger	Read Replies (2) \| Respond to of 14631

Brian, Going back to the original point--these expenses are no longer appropriate to "operating expense", because they are not part of the normal on-going operations. Note that the basis for the big write-downs is included in the story--they closed many of the "superstores". Since these are no longer part of the current sales effort (and since they were so large), they are separated into a separate area. The key here is that "operating" expense is the real cost of producing current new sales. That is why restructuring costs are accounted separately. The operating costs to produce $180M of sales in Q4 97 should be the same as to produce sales in Q1, Q2, Q3, or Q4 98, unless they change the head count or other things associated with producing sales in the current or future quarters. In other words, they should have around $160M of expense in each of the quarters this year unless they choose to grow "operating" expenses, and they should grow operating expenses only as sales grow. In other words, you should not try to apply the restructuring charges as an adjustment to operating expenses. Mark