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Technology Stocks : Applied Magnetics Corp -- Ignore unavailable to you. Want to Upgrade?

To: appro who wrote (11967)	5/19/1998 5:43:00 PM
From: Jonathan Bird	Read Replies (1) \| Respond to of 12298

APM 10-Q is out. Excerpt follows. freeedgar.com Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations --------------------------------------------------------------- The disk drive industry entered into a general slowdown late in the first quarter of fiscal 1998 and also accelerated the transition from disk drives using advanced inductive thin film recording heads to magnetoresistive ("MR") recording heads. The Company's largest customer, Western Digital Corporation ("Western Digital"), sharply reduced its production schedules as a reaction to the hard disk drive oversupply in the industry's distribution channel. As a result, the Company experienced significant cancellations, production reschedules and price reductions that have continued to impact revenue, operating and financial results through the first half of fiscal 1998. In response to reductions in production schedules, the Company took several measures to reduce expenditures, including capital spending, in order to realign costs to the current level of business. In addition, the Company shut down its manufacturing facility in Ireland in order to consolidate foreign manufacturing operations. A pre-tax restructuring charge of $8.4 million was recorded during the first quarter of fiscal 1998, primarily relating to the costs associated with the shut down of the Ireland facility. Included in the charge was the write-down of certain tooling and equipment. The Company used $4.0 million of the reserve during the first half of fiscal 1998 and expects the majority of the transactions to be completed by the end of the third quarter of fiscal 1998. As inductive thin film products reach end of life, revenue from these products will continue to decline during the second half of fiscal 1998. However, the Company is currently working on completing qualification of the Company's 2.1 gigabytes per 3.5" disk advanced inductive thin film product. Subject to successful qualification, production volumes will commence in FQ498 and will be expected to continue through at least the first quarter of fiscal 1999. The Company continued its engineering and development efforts towards MR and other advanced technologies. However, the Company experienced significantly lower MR revenue during the first half of fiscal 1998 compared to the same period in the prior year. Three MR programs reached end of life earlier than expected during the first half of fiscal 1998. The current oversupply in the disk drive industry and customers' decisions to shift focus to other disk drive product lines contributed to accelerated termination of the programs. The Company also continued to experience process and production delays for qualifying on new MR programs. As a result, the Company has been unable to participate on MR disk drive programs that are currently in volume production by disk drive manufacturers. The Company is in the qualification process on MR programs with capacities of 2.8 and 3.4 gigabytes per 3.5" disk. Subject to successful qualification, the Company would begin shipments towards the end of the fourth quarter of fiscal 1998. The Company also plans to deliver samples of its first giant magnetoresistive ("GMR") products during FQ398. Significant engineering and manufacturing resources have been allocated to these new product development efforts. Future revenues and operating results will be dependent on the successful qualification and timely production ramp of the advanced inductive thin film 2.1 gigabytes per 3.5" disk product and new MR products. While the Company is devoting significant engineering and manufacturing resources to these efforts, there can be no assurances that the Company will realize satisfactory competitive product and process development results. To the extent that the Company is unable to do so, there would be a continued material adverse effect on the Company's operating results and liquidity.

To: appro who wrote (11967)	5/19/1998 6:32:00 PM
From: KellyW	Read Replies (1) \| Respond to of 12298

Appro and Alien Monster Tech: Thanks for the link to Captain's same kind of b.s. response I used to get from Crisman myself. Poor Captain, hope he didn't fall for it all the way. I did, but at least I pulled out with a profit and just in the nick of time. Anyway, I just bought GALTF today. I read the latest CRN, a lengthy piece about WDC's new 3 year contract with IBM for GMR heads. It really looks bleak for APM. Real bleak. They got an old GRM inventor from IBM and I used to think that guy was something, now I wonder if IBM didn't let go of a retread. APM just might be dead-dead. Catch you on the GATE, GALTF, or PWAV threads. I won't be back unless something meaningful happens here, like the dead cat gets another miraculous life, and that's what its gonna take.