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Technology Stocks : COM21 (CMTO) -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (51)	11/3/1998 1:12:00 PM
From: Tony Chimienti	Read Replies (2) \| Respond to of 2347

Hi Pat, I am new to this thread and to this market...You made the comment: "I agree the big boys will grab the lion's share of the market, and I honestly don't expect CMTO to stay independent for long" Is is too early in this market evolution to make an educated guess at who would buy or partner with CMTO? Do you think the big boys(Cisco, 3Com, or whomever?) will just let CMTO exist right along side them in this space? Thanks, TC

To: pat mudge who wrote (51)	11/3/1998 5:49:00 PM
From: neverenough	Read Replies (1) \| Respond to of 2347

COM21 INC files 0930 qtr 10-Q. Reports $13.6 mil tot rev and $-0.14 EPS. IFN Smart Edgar News - November 03, 1998 17:10 Excerpted from 10-Q filed on 11/03 by COM21 INC: COM21 INC files 0930 qtr 10-Q. Reports $13.6 mil tot rev and $-0.14 EPS. Results of Operations Total Revenues - Total revenues increased 145% from $5.6 million in the third quarter of 1997 to $13.7 million in the third quarter of 1998, and increased 228% from $9.0 million for the first nine months of 1997 to $29.4 million for the first nine months of 1998. Both cable modems and headend products experienced sales growth over the comparable quarter and nine month period in the prior year as demand for the Company's products continued to be strong. Cable modem revenue increased at a greater rate than headend products as the Company's installed base of headend products was able to support a greater number of cable modems. Cable modem sales accounted for 62.6% of total revenue in the third quarter of 1998 as compared to 31.5% in the third quarter of 1997 and cable modem sales accounted for 53.5% of revenue in the nine months ended September 30, 1998 as compared to 28.7% for the nine months ended September 30, 1997. Headend product sales accounted for 36.4% of total revenue in the third quarter of 1998 as compared to 57.2% in the third quarter of 1997 and headend product sales accounted for 44.8% of revenue in the nine months ended September 30, 1998 as compared to 60.5% for the nine months ended September 30, 1997. The remaining balance of revenue is related to the Company's network management software. The average sales price of cable modems continued to gradually decline during the third quarter of 1998 due to competitive pricing pressure. The Company anticipates that average sales prices of cable modems will continue to decline at a faster rate in the face of competition and the adoption of industry standards such as DOCSIS. During the quarter ended September 30, 1998 international sales accounted for 51% of total revenues, decreasing from the 70% of international sales in the third quarter of 1997. This decrease was primarily due to a greater proportional increase in sales of all products to large domestic cable companies. Gross Margins - Gross margins decreased from 46.5% in the third quarter of 1997 to 38.0% in the third quarter of 1998, and decreased from 49.7% for the first nine months of 1997 to 35.6% for the first nine months of 1998. The decrease is due primarily to a shift in product mix from the higher margin headend equipment to the lower margin cable modems. The decrease in margin during the periods was partially offset by a decrease in the cost of cable modems as the Company's cable modem cost reduction program led to lower costs of modems during the quarter. The benefits obtained as a result of this cost reduction program were partially offset by a decrease in the average sales price of cable modems. The Company is continuing its focus on cost reduction efforts on cable modems and anticipates continued benefits obtained as a result of this program. These benefits are expected to be partially offset by decreases in the average sales price of modems. Research and Development - Research and development expenses increased 42% from $3.3 million in the third quarter of 1997 to $4.7 million in the third quarter of 1998, and increased 41% from $9.5 million for the first nine months of 1997 to $13.4 million for the first nine months of 1998. The increase was attributable to higher costs related primarily to increased personnel and equipment related costs. The Company expects these expenses to increase in absolute dollars in the future as the Company continues its investment in research and development. Sales and Marketing - Sales and marketing expenses increased 92% from $1.4 million in the third quarter of 1997 to $2.6 million in the third quarter of 1998, and increased 99% from $3.4 million for the first nine months of 1997 to $6.7 million for the first nine months of 1998. The increase was attributable to higher costs associated with increased personnel, commissions on increased sales, consulting and more trade advertising and promotion. The Company increased its sales and marketing headcount with domestic sales and support staff and with international sales personnel. The Company intends to pursue sales and marketing campaigns aggressively and expand its sales presence domestically and internationally, and therefore expects these expenses to increase in absolute dollars in the future. General and Administrative - General and administrative expenses increased 198% from $0.4 million in the third quarter of 1997 to $1.3 million in the third quarter of 1998, and increased 123% from $1.2 million for the first nine months of 1997 to $2.7 million for the first nine months of 1998. The increase was attributable to higher legal expenses, increased salary costs and higher consulting costs related to recruiting. The Company expects general and administrative expenses to increase in absolute dollars as the Company continues to incur legal costs related to litigation, adds personnel and incurs additional costs related to the growth of its business. (End of Item Excerpt) ----------FINANCIAL DATA SCHEDULE-------- MULTIPLIER 1,000 PERIOD-TYPE 3-MOS FISCAL-YEAR-END DEC-31-1998 PERIOD-END SEP-30-1998 CASH 43,542 SECURITIES 23,926 RECEIVABLES 7,794 ALLOWANCES (790) INVENTORY 5,434 CURRENT-ASSETS 80,737 DEPRECIATION 0 TOTAL-ASSETS 86,781 CURRENT-LIABILITIES (10,050) BONDS (18) PREFERRED-MANDATORY 0 PREFERRED 0 COMMON (19) OTHER-SE (75,290) TOTAL-LIABILITY-AND-EQUITY (86,781) SALES 13,686 TOTAL-REVENUES 13,686 CGS 8,486 TOTAL-COSTS 8,486 OTHER-EXPENSES 8,593 LOSS-PROVISION 0 INTEREST-EXPENSE 0 INCOME-PRETAX (2,478) INCOME-TAX 5 INCOME-CONTINUING (2,483) DISCONTINUED 0 EXTRAORDINARY 0 CHANGES 0 NET-INCOME (2,483) EPS-PRIMARY (0.14) EPS-DILUTED (0.14) ------------------------------------------------------------------------ DISCLAIMER: The information provided through this news feed is excerpted from documents filed with the Securities and Exchange Commission (SEC) and should not be relied upon without review of the full documents filed with the SEC. 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