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Technology Stocks : Osicom(FIBR) -- Ignore unavailable to you. Want to Upgrade?

To: Brian who wrote (7019)	5/28/1998 10:10:00 PM
From: David Pawlak	Read Replies (3) \| Respond to of 10479

I'll keep this very short as I have a lot of studying to do before Saturday's big test and I don't expect to look back at this board until Sunday so don't take it personally if I don't respond to further questions until then. -Gross Margins were 50 basis points higher than I expected. This is the highest it's been on my model that goes back 2 years. This is excellent and an indication that new products are beginning to make a larger contribution to total revenues. -Selling & Marketing was $600k higher than I expected. This is good only if these extra efforts result into increased sales in the future. I believe they spent a lot of cash beefing up VAR channels and flying around (including internationally) giving GigaMux presentations which certainly contributed to the increased amount. -R&D was $350k lower than I had expected. -G&A was $300k higher than I expected. -Revenues were $6.4 million lower than I expected, of which $5.3 million was due to Asian economic problems. This is without a doubt disappointing but not indicative of the new products progress. The 3 new products (the reason I am holding the stock) have yet to contribute substantially although signs are pointing to them beginning to ramp up materially with 21 current GigaMux evaluations in progress (far more than I even optimistically hoped for and is a direct result of the recent influx of capital) and a significant amount of VARs (15 if I recall correctly) taking delivery of IQX. In addition, NET+ARM is slated for approximately $1.6 million of new revenues this year as a result of the first 12 design wins. In addition, other revenues from the NET+ARM's printer customers will come in (I beleive they already started with Xerox) that aren't included in the 55,000 chip estimate for this year. One interesting note I learned subsequent to the conference call was that Renn (the new director) has begun to take an active role in reveiwing the company and making suggestions for improving/strengthening the management. I'm not sure if he will do this on a consulting basis or for free but it is clear that he is going to be spending a lot of time over the next few weeks looking for ways to strengthen the company. With his background, I believe this may be very beneficial to shareholders as this is his specialty. I wish this tidbit would have been conveyed on the call. Renn is certainly the right man for the job. I was (and I'm sure many others may be) concerned about Par buying the preferreds he referred to on the conference call and converting them at low prices, thereby taking advantage of a reduction of the share price at shareholders expense. He assured me that that cannot legally happen because of a law (16B?) that prohibits an insider from buying/converting into shares within a certain time period (6 months?) at lower prices than he sold at. He said that since he sold as high as 4 in that time period, that those preferreds couldn't be converted any lower than that. Overall, gross margins were better than I expected and GigaMux evaluations were far more than I expected. The revenues from the Far East simply did not pan out.. a problem many companies have been faced with recently. The question is... how much of the revenue and earnings shortfall has already been priced into the stock with the stock falling from $4 to sub $3 in the last couple weeks? It's my opinion that the parts of the company are worth far more than the current whole and that sales efforts (GigaMux evaluations, IQX VAR channel ramp up and NET+ARM design wins) are pointing to revenue ramp up.