Conference hydra::amiga_v1

173.0. "Financial News" by LEIA::SWONGER (What, me worry?) Thu Nov 13 1986 14:36

	From Computer Systems News, Monday, November 10, 1986
	
	   WEST CHESTER, PA - Commodore International Ltd. last week
	reported a profit of $3.7 million, or 12 cents per share, on
	$176  million  in revenues for the first quarter ended Sept.
	30.

	   For the year-ago quarter, Commodore lost $39.2 million on
	$159.2 million in revenue.

	   The results   marked   Commodore's   second   consecutive
	quarterly  profit after a string of losses. The company lost
	$127.9 million for the 1986 fiscal year.

	   The modest  profit  on  top of an 11 percent revenue gain
	was  viewed by analysts as further evidence that Commodore's
	cost-cutting  efforts  have succeeded in putting the company
	back on track.

	   "Clearly they  have dramatically reduced their break-even
	cost  point,"  said Charles Wolf of First Boston Corp. "They
	still have a precarious balance sheet, but on an operational
	basis  they've  turned  the  corner-and  that's  the  key to
	survival," he added.

	   The first-quarter  profit,  a  $2.5 million increase over
	the   preceding  quarter's  $1.2  million,  came  despite  a
	seasonal  sales  decline.  Commodore  had  $208.6 million in
	revenue for the preceding quarter.

	   Commodore's improved  financial  performance for the past
	two  quarters  stemmed in part from cost reductions taken in
	the  second  half  of  fiscal 1986, said president and chief
	executive Thomas Rattigan in a prepared statement.

	OPERATING COSTS CUT

	   "Operating expenses  as  a  percentage  of  sales  in the
	September  quarter  were at the lowest quarterly level since
	the June quarter of fiscal 1984," Rattigan noted.

	   Although Commodore may have turned the corner in terms of
	profitability,  the  company's debt remains high and will be
	difficult  to  decrease unless the company can substantially
	increase its revenue, said First Boston's Wolf.

	   "It will take them a long time to pay off the debt at the
	very  least,  but at least the company is not hemorrhaging,"
	Wolf said.
	
	   Commodore owes   its  major  lenders  approximately  $140
	million.  However, the company has succeeded in renewing its
	agreement with those lenders. For a time, Commodore had been
	in  technical default of its loans until receiving temporary
	extensions of the covenants earlier this year.

	Reproduced without any sort of permission whatsoever.