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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: NNThinker who wrote (5716)	7/25/1998 2:16:00 PM
From: devans	Respond to of 18016

Sure, the exchange rate could help a bit but it would be mostly on the labour side. Chips and components are generally from U.S. suppliers, paid in U.S. dollars. The 1997 Report shows 40% of the revenue coming from outside the Americas. Unfortunately, I didn't see a breakdown within the America's. A high percentage of sales within Canada could have a negative effect. Also note that multinationals take steps minimize the effects of currency fluctuations using exchange contracts and the like. from the 1997 report... Because substantial portions of the Company's sales, cost of sales and other expenses are denominated in U.S. dollars and Pounds Sterling, the Company's results of operations are subject to change based on fluctuations in the rates of exchange of those currencies for the Canadian dollar. During fiscal 1997, the decrease in the value of the Canadian dollar against the U.S. dollar and the Pound Sterling relative to exchange rates in fiscal 1996, resulted in no material variance in reported sales, gross margin or income from operations. During fiscal 1996, the increase in the value of the Canadian dollar against the U.S. dollar and the Pound Sterling relative to exchange rates in fiscal 1995, resulted in no material variance in reported sales, gross margin or income from operations. For information related to the Company's policies in its management of foreign exchange exposures, see Note 11 to the Consolidated Financial Statements. 11. Financial Instruments and Concentration of Credit Risk The Company uses financial instruments, principally forward exchange contracts, in its management of foreign currency exposures. Realized and unrealized foreign exchange contracts are recognized and offset foreign exchange gains and losses on the underlying net asset or net liability position. These contracts primarily require the Company to purchase and sell certain foreign currencies with or for Canadian dollars at contractual rates.