To: Moonray who wrote (20661 ) 8/17/1998 4:01:00 PM From: David Lawrence Read Replies (1) | Respond to
Hummm. I think they missed a few words in that piece. Perhaps a little editorial license is in order.....[Rockwell based] North American analog modem market declined sharply in the second quarter as consumers delayed upgrading to newer modem technologies," according to Ron Howard, Hayes' CEO. Hayes began shipping V.90 modems in the quarter but [Rockwell based] ISPs were slow to deploy V.90 service so [their] customers saw no reason to upgrade. As a result, Hayes had to cut production substantially and write-off $9.6 million of inventory. More write-offs are expected in the current quarter.[a paltry] $4 million; inventories, current debt, long-term debt and accounts payable are all up. [assuming they have better luck than Motorola did] . This will bring in much-needed cash while potentially freeing Hayes to buy products in from cheaper sources. The company also declares it will carry out "a comprehensive down-sizing and restructuring plan" to concentrate its resources on the new DSL, cable modem, RAS and voice over IP markets [, spaces which are already highly competitive and will not tolerate 2nd rate outfits like Hayes to exist] .[continue their meager and ultimately futile attempt to] stay in the analog modem business but will aim to run it as a cash cow [Huh? Perhaps they mean a bovine that eats money?] rather than a growth unit. More restructuring and other special charges are expected in the next two quarters but Ron Howard says Hayes' [pie in the sky] strategies "are designed to achieve profitability in 1999."[such as US Robotics who tried to bail them out of bankruptcy before] . It will be [extremely] difficult [if not impossible] for Hayes to start rebuilding its position in the market until the issue of its long-term future is properly resolved. [This is not expected to occur until some time after the mothership returns.]
