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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Erik Lundby who wrote (16868)	7/28/1998 9:09:00 AM
From: Rajiv	Respond to of 18263

Zitel Concludes Sale of Storage Business FREMONT, Calif., July 28 /PRNewswire/ -- Zitel Corporation (Nasdaq: ZITL - news) announced today the sale of its Intelligent Storage Systems unit (ISS) to Silicon Systems & Technologies, Inc. (SST), a subsidiary of Gores Technology Group of Los Angeles, California. Former Zitel employees, including the ISS management team, have joined SST. SST has assumed responsibility for product warranty and technical support and the continuing development, marketing and service of the ISS products, including its flagship CASD II systems. A Zitel spokesman stated that the purchase price included cash and a note totalling $1,000,000 and royalties of up to $4,000,000 payable over four years based on sales of ISS products. Jack H. King, President and CEO of Zitel, stated, ''We are pleased to have concluded this important phase of our transition plan. With the management team in place, supported by Gores Technology Group and the previously announced agreement with Hitachi Computer Products (America), Inc. known for its world class manufacturing capability, SST is well-positioned for success. Our loyal customer base should also be well-served by SST. This divestiture will allow Zitel to intensify its focus on its Datametrics software and Year 2000 businesses.''

To: Erik Lundby who wrote (16868)	7/28/1998 10:36:00 AM
From: Marconi	Respond to of 18263

Hello Mr. Lundby: Zitel's Qtrly report showed: Revenue for the third quarter of fiscal 1998 totaled $5,340,000, as compared to $3,352,000 in the year ago quarter. Net sales for the current quarter were $4,591,000 versus $2,215,000 in the same quarter of the prior year. May 22, 1997 was the $25M placement of convertible debentures. They are showing an apple and oranges comparison. Or for a more accurate perspective, for nine months, their $25M investment has increased revenues by $2M, and the next quarter will be absent the storage division revenues and cash burn. The fewer segments Zitel management operates, the lower their rate of destruction of capital. Zitel is finally cleaning up some of the big items-on order of $10M- I felt they improperly carried on their balance sheet because of no prospect for a turnaround in the related segments. Given the unacknowledged apples and oranges presentation, Zitel management is not coming clean, but employing the pile on the losses mentality for disastrous quarters--and after hype PR. Bad management practices continue and abound in Zitel. Best regards, m