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

To: Ken Modelski who wrote (2415)	4/24/1998 1:27:00 PM
From: bob zagorin	Read Replies (1) \| Respond to of 13797

hard to say Ken although i haven't seen too many ceo's or presidents of software companies posting in ALL CAPS on the yhoo boards using that kind of language. i imagine there's some truth to it but who knows what kind of company he really has. while we're waiting, thought you all might appreciate the following excerpt from a discussion on the IFMX thread. as you may know, IFMX wore the dread E for awhile during a restatement and the ORCL CEO predicted they were dead. Their stock dropped below 5 which is pretty bad for that big a company. now they're doing better and the following excerpt from someone who knows is an interesting insight into how the revenue was, is and will be recognized. not saying ALTSE is the same or whatever, just an interesting analogy. i guess my point is that ALTS is not the first (nor the last) software co. that has recognized revenue in what was later decided to be an inappropriate way. of course, we may learn that jay and/or john did something worse before this is all done. "...I think that there is a misunderstanding of how the effects of "defferred income". You seem to think it is all "restatement income" that is just waiting to be recognized (I think). That is not true. First, there are two components to it. The first part is the fact that many companies pay for a year of "maintenance" at a time. This is services income. It probably accounts for $80-90M of the deferred income, or a little more than the amount of "services" income recognized each quarter. If you want to verify this, go back to the pre-restatement reports and look at the size of this number. When they restated the numbers, they also changed the way that income from VAR's and distributers is recognized (about half of total license sales each quarter). Now that portion is not "recognized" or counted as sales until and actual "end user" takes possession, even though IFMX may have gotten cash from the VAR or distributer. That cash is held in the deferred income account until they get a report from the middleman that shows the product has moved out of the warehouse/store/office to a customer. The difference is that IFMX continues to sell to these VAR's and distributers. I would expect this area to reach "steady-state" or even positive growth by later this year (new flows to VAR's and distributers matching the flows to end-uers). I think that the steady state in deferred income account will be in the $150-200M range, and then will grow to match the growth in overall sales in the future..."