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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Saul Feinberg Jr. who wrote (9204)	6/25/1998 2:34:00 PM
From: J. Conley	Read Replies (1) \| Respond to of 42804

Thread, Thanks for responses. I am still trying to get a handle on this inventory issue. Originally, I did not fully understand all the concern over inventory because I did not know whether MRVC's inventory was an "inventory in the channel" kind of problem or if they might have a lot of obsolete junk lying around. Also, I did not know if this was having any other adverse affect on the company. I looked at the three companies Saul did to see if there were any obvious differences in how they compute their inventory (although I am uncertain whether these companies are truly "peers" to MRVC). Note that, of these, MRVC is the only company that states that inventories consist of material, labor and overhead. Why labor and overhead? How do you compare two companies inventories when one includes material, labor and overhead and the other includes only component parts. Does "work-in-process" always include labor and overhead? Is that distinguishable from "products in process" (term used by ASND.) Any accountants have an explanation? From the respective 10-Ks: MRVC Inventories are stated at the lower of cost (first-in, first-out) or market and consist of material, labor and overhead. XYLN Inventories, consisting principally of component parts, are stated at the lower of cost or market being determined using the first-in, first-out method. Inventories are shown net of valuation reserves of $2,635,000 and $458,000 at December 31, 1997 and 1996, respectively. ASND Inventories - Inventories are stated at the lower of cost (determined by the first-in, first-out method) or market. The Company provides for obsolete inventories in the period when obsolescence is determined to have occurred. CSCO INVENTORIES Inventories are stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost on a first-in,first-out basis. (CSCO includes demonstration systems, all the companies use the other three standard items in the inventory breakdown.) jc