To: Jimbo Cobb who wrote (489 ) 10/5/1998 1:08:00 PM From: Larry Voyles Read Replies (1) | Respond to
Disturbing "gems" in 3Q results: Beginning in the third quarter, the Company became the primary source of funding for Topp through the supply of phones and, under generally accepted accounting principles, was required to recognize 100% of Topp's losses. The Company expects Topp to incur pre-tax losses of $10.0 to $12.0 million per quarter in the near term as it continues to grow its customer base and fund the acquisition costs to acquire new customers. Ouch!Inventories of $279.1 million were higher than those at May 31, 1998, of $205.2 million, primarily as a result of increases in inventories of high-end wireless phones in Greater China. The annualized inventory turn rate at the end of the third quarter, approximately eight times, was in line with annualized rates at the end of the previous two quarters. The Company had borrowed $57.6 million as of August 31, 1998, under its multicurrency revolving credit facility. Positives:
