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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Larry J. who wrote (2970)	7/13/1998 10:29:00 PM
From: Starowl	Read Replies (1) \| Respond to of 5944

Larry: I don't think the RIF charges are part of the $65-70 million write-offs for Ridge and Analog Devices technology acquisitions. They will be added to those charges, bringing the total to $73-$82 million for 1st Qtr '99. (AND, as Jim Switz points out in the next post--thanks for the 15-minute edit window--, there's $20 million charged against the Symbios effort, making the high total $102 million.) I am a bit surprised that the original estimated write-off ($8-12 million) for the first RIF of 200-250 employees will now include the 350 Singapore employees. That's a pretty big recalculation. Maybe Hansen had problems with math. (Just kidding, Paul). I won't speculate about why Hansen is leaving, but those things happen. Been around for awhile. Starowl

To: Larry J. who wrote (2970)	7/13/1998 10:31:00 PM
From: Jim Switz	Read Replies (3) \| Respond to of 5944

Yep, it sure looks like they want to dump all the smelly stuff out right now, and consider it past - especially since they said these layoffs would be "incorporated in the previously announced $8-12 million restructuring charges being applied against Adaptec's first fiscal quarter, ended June 30, 1998." Do we read this as the $8-12M charge covering the 250 USA layoffs PLUS the 350 Singapore layoffs? How long have they been planning the Singapore layoffs - since the domestic RIF announcement in April? Hmmm. But, I don't think this amount is part of the $65-70M charges announced July 2; that release specifically allocated these charges against the Ridge/ADI acquisitions, making no mention of RIF charges. So, here's what I see as the writedowns: $70M Ridge/ADI $12M Singapore/USA layoffs $20M Symbios costs Total: $102 million (I used the high end of all ranges). This is about 89 cents/share. Estimating an operating profit of 12 cents/share (my guesswork), this results in a net loss of $0.77/share. If I can do this math, I'm at the end of the line after the analysts who get paid to do it. The Singapore layoffs are not too surprising; revenues have declined at least 25% short-term, and they have to cut costs. I'm guessing these 350 workers equate to one shift at the factory, and that they're down to about 600-650 people in Singapore after this. Looks like they've announced layoffs of about 600 people total, worldwide, out of a previous total of about 3,500 people. It's never good to hear you're being let go, but severance packages will help, and the USA workforce should have no trouble finding new positions almost immediately. The construction of a new Singapore factory IS news to me, though; anyone heard that one previously? If the new factory is more efficient, they may not need to hire everybody back eventually, improving overall cost structures. Still, I bet their margins for the next quarters will be a lot stinkier than the 59-62% we've seen the last couple of years.