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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Charles Hughes who wrote (11149)	6/26/1998 11:13:00 PM
From: Mark Finger	Read Replies (1) \| Respond to of 14631

I do not see where they report the expected revenue from the Channel based on contracts they signed. For companies like Sybase and Oracle, last year it was part of license sales at the point it was shipped to the customer, provided there was a no-return/no-refund policy (Sybase got in trouble in Japan because they were writing return/refund statements in "side-letters"). This year, they cannot count these until the actual product is shipped to the end user. This difference is to eliminate the parctice of "channel-stuffing". As I understand it, IFMX should be an apples to apples case, because all the former years were restated to this criteria. Part of the IFMX problem is that they have been paid for stuff that may sit on the shelf for a year or two (or some certain worse cases). That is why they had to go out for extra financing (see the big liability item on the balance sheet for advance payments for licenses). In the case of Sybase, the question is how much do they move through VAR's and the channel. In the past, it was much less than IFMX (only about 25% for Sybase compared to 50% for IFMX). However, that would mean that the license numbers for Q1 may have been about 15-20% below the equivalent numbers for the former accounting methods. Over the next year, the effect of this should be reduced so that by about Q4, the effects should be under 5% for Sybase. The only way to gain meaning full numbers is to find out how much of sales on the average was to OEM's, VAR's and distributers (as opposed to direct sales to end-users). I do not see any way to get this from financial summary numbers normally reported for the quarter.