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Technology Stocks : CDCO - CidCo Incorporated -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (182)	4/1/1999 12:00:00 PM
From: Elroy	Respond to of 204

More nuggets from the 10-K... FINANCIALS - GROSS MARGINS EXPECTED TO IMPROVE: "Gross margin as a percentage of sales decreased to 17.7% in 1998 from 44.9% in 1997 due to the overall decrease in average sales prices and the extensive liquidation of discontinued products. Although gross margins vary due to changes in sales mix by distribution channel and product mix, the Company expects that gross margins will range from 20% to 30% in 1999. " FINANCIALS - R&D, SALES & MKTG. AND G.&A COSTS EXPECTED TO DECLINE AS % SALES: "Research and development expenses as a percentage of sales decreased to 6.2% in 1998 from 6.6% in 1997. The Company expects research and development expenses will range between 5% and 6% of sales in 1999. " "The Company anticipates that selling and marketing expenses as a percentage of sales will decline in 1999 due to planned reduction in acquisition sales programs. " "The Company believes that general and administrative expenses will decrease in 1999. " "The restructuring has reduced permanent headcount from the prior year's level by approximately 41% as the Company focuses on its core telephony products and services business. " FINANCIALS - TAXES FOR 1999 EXPECTED TO BE ZERO: "The Company expects no tax provision in 1999 due to a loss carry-forward from 1998." PRICE PRESSURE HAS ABATED: "Sales decreased 32% to $174.7 million in 1998 from $257.0 million in 1997, primarily due to the 33% decrease in average sales price per adjunct unit. This pricing decrease was due to competitive pricing pressures from both Asian suppliers to the United States market and certain domestic suppliers as well as a decline in Direct Marketing programs. Prices have stabilized since Asian currencies stopped their decline against the US Dollar." NEW PRODUCTS IN 1999: "To expand its product offerings for 1999 and beyond, CIDCO has plans to introduce appliances that will use the Internet/telephony networks to enable consumers to handle interpersonal communication in a non-PC environment. CIDCO has plans to introduce in 1999 a simple,inexpensive, single-use e-mail device that will finally bring e-mail to the masses, especially to those who do not have access to or the need for a personal computer in their homes. " COMPETITION: "Be a Low Cost Producer of Intelligent Network Subscriber Telephone Equipment The Company intends to benefit from its ability to reduce manufacturing costs by engineering products for high volume assembly and by stressing low cost manufacturing design while maintaining quality, consistency and reliability. The Company believes that its experience and acquired knowledge will permit it to achieve low manufacturing costs for its products, under current market conditions. " "The Company expects competition to increase in the future from existing and new competitors, possibly including current customers. The Company believes that the principal competitive factors in its market are knowledge of the requirements of the various Telcos, product reliability, product design, customer service and support, and product price relative to performance. The Company believes it presently competes favorably with respect to each of these factors." STOCK REPURCHASE HAS BEGUN: "On January 27, 1999, the Company announced plans to purchase up to two million shares of its outstanding Common Stock. As of March 3, 1999, the Company had repurchased 698,000 shares at an aggregate purchase price of $3.1 million. " so...Gross margins up, expenses down and pricing stable. That sounds like a pretty positive report, as far as I can surmise.