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Technology Stocks : Equinox Systems (EQNX) -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (451)	6/19/1998 10:51:00 AM
From: DD™	Read Replies (1) \| Respond to of 765

Good work Rainier. It looks like there might be some bad news on the way. Do you think "smart money" was checking into SI thread content over the past 24 hours, thus resulting in the high SI Hot Topics ranking? DD

To: HeyRainier who wrote (451)	6/19/1998 2:30:00 PM
From: Quad Sevens	Read Replies (2) \| Respond to of 765

Rainier: That inventory growth was up is old news, and was noted on this thread at the time. The question is: what does it mean? With EQNX participating in one the largest POS contracts ever, inventory growth looked reasonable and natural. Another possibility for the recent downturn is a delay or snag with the IBM/Post Office contract. Note: I have no knowledge this is the case. Just wondering aloud like the rest of you. Of course, other possibilities are smallcap market malaise, Asia, HP woes, ... Wade

To: HeyRainier who wrote (451)	6/22/1998 12:36:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 765

I was looking at the filings again, to try and look at this from a different perspective. The most recent 10-Q (for period ending 3/31/98) has for its sales figures a year over year comparison (Q1 to Q1), while for the balance sheet items, it is done on a sequential basis (Q4 to Q1). Doesn't it make the comparison of inventory and sales growth more meaningful if the periods are matched? I would like some input on this, if anyone can add something. So I did just that, and here's what we have: Q1(3/31/97) Q1(3/31/98) % Change ----------- ----------- -------- Sales: 6,364 7,756 + 21.9% Inventory: 4,490 4,524 + 0.8% Receivables: 3,163 4,469 + 41.3% So with this scenario, where the time periods are better matched, the problem shifts from that of inventory to accounts receivable. From Financial Shenanigans: "If accounts receivable are growing much faster than sales, it usually means that the company is having trouble collecting from customers. If the condition persists, the company will eventually experience negative cash flows." Actually, this is the situation that developed at Sunbeam (SOC) in the third quarter. Sales were up 24.7%, but receivables were up 58.9%. That was the first warning, then Stuff hit the fan in the fourth quarter, with Inventory up 57.9% and Receivables up 38.5%, while sales were up only 25.7%. Can anyone else comment? Regards, Rainier