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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (3520)	6/5/1998 5:42:00 PM
From: Sam	Respond to of 9256

Here is another excerpt, on Maxtor's customer mix: CUSTOMER CONCENTRATION The Company focuses its marketing efforts on and sells its HDDs to a limited number of PC OEMs, distributors and retailers. During the quarter ended March 28, 1998, two customers, Dell Computer Corporation ("Dell") and IBM, accounted for approximately 25% and 18%, respectively, of the Company's revenue, and the Company's top ten customers accounted for approximately 74% of the Company's revenue. During the fiscal year ended December 27, 1997, two PC OEM customers, Compaq Computer Corporation ("Compaq") and Dell accounted for approximately 21% and 10%, respectively, of the Company's revenue, and the Company's top ten customers accounted for approximately 60% of the Company's revenue. During the fiscal year ended December 28, 1996, one customer, SED International Holdings, Inc. ("SED"), a distributor, accounted for approximately 11% of the Company's revenue and the Company's top ten customers accounted for approximately 68% of the Company's revenue. During the fiscal year ended March 30, 1996, while no customer accounted for more than 10% of the Company's revenue, the Company's top ten customers accounted for approximately 51% of the Company's revenue. The Company anticipates that a relatively small number of customers will continue to account for a significant portion of its revenue for the foreseeable future, and that the proportion of its revenue derived from such customers may continue to increase in the future. The ability of the Company to maintain strong relationships with its principal customers, including in particular its PC OEM customers, is essential to the 17 <PAGE> 19 ongoing success and profitability of the Company. Although the Company believes its relationships with key customers generally are good, in order to maintain its customer relationships, particularly with PC OEMs, the Company must be among the first to volume production with competitive products. The concentration of sales in a relatively small number of major customers represents a business risk that loss of one or more accounts, or a decrease in the volume of products sold to such accounts, could have a material adverse effect on the Company's business, financial condition and results of operations.

To: Sam who wrote (3520)	6/5/1998 5:44:00 PM
From: Frodo Baxter	Read Replies (4) \| Respond to of 9256

>Did you follow what they said about why they lost money in the last quarter? Something about $14 million in "compensation" due to a plan that has now been amended? (Gee, I wonder who got that, Mr. Park or Mr. Lee, I suppose.) Yeah. It's detailed in the 10Q and the document in its entirety is in the 10K. I read both a while back, but lost interest, as Maxtor wasn't potentially investable till now. Here's the 10Q abridged version: The Company adopted an Amended and Restated 1996 Option Plan in February 1998 to remove the variable features, and offered and re-issued new fixed-award options in April 1998 for the majority of employees which had previously held variable options. In connection therewith, the Company recorded compensation expense related to the difference between the estimated fair market value of its stock as of March 28, 1998 and the stated value of the Company's options. Compensation cost was reflected in accordance with Financial Accounting Standards Board Interpretation No. 28, "Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans." As I recall from memory (be wary, be very wary), when Hyundai took out Maxtor, the intent was always to bring it back public somewhere down the line. The carrot was a boatload of options awarded to Mike Cannon. There were certain requirements for them to vest... something about profitability for a few quarters... but an IPO would vest them all immediately. I guess they fixed it so that he wouldn't get a huge payday now that the IPO is predicated on weakness rather than strength. <pedestal> I find your practiced outrage at the Korean mismanagement amusing. Incredible feats of management stupidity are always based on one thing and one thing only: excessive hubris. A trait not unknown to us Americans, I might remind you. </pedestal>