es1@cunixb.cc.columbia.edu (Ethan Solomita) (11/08/90)
I received the Commodore Annual Report for the year dated July 1, 1989 through June 30, 1990. I have tried to extract relevant information that would be of general interest. I'll start off with non-corporate fiscal information and leave the more technical stuff till the end. First, Mehdi Ali and Irving Gould both got hefty pay increases since last year. Irving Gould had "Cash Compensation" of $1,750,000. Mehdi Ali, President of Commodore International Ltd., received $2,015,949. Everyone else received well under that, with Harry Copperman receiving $459,142. All 17 executive officers received $7,370,235, which is more than Commodore's total profits for the entire year, although admittedly this was a very lean year. As always Irving Gould owns 20% of Commodore stock, or 6,595,338 shares which is worth about 45 million dollars at present stock values. Although this makes a takeover very very difficult, it does mean that Irving most definitely does want the company to do well since every 1/8 the stock moves up makes him a profit of 800,000 dollars! Mehdi Ali, the member of the board with the second largest amount of stock, by contrast has only 405,982, or slightly more than 1%. Of Commodore's total revenues, 75% came from Europe. North America, including Canada and the U.S., comes to only 18%. Australia and the Far East represent 7%. Here are a few quotes from the Annual Report: Unit sales of the Amiga 500 increased by more than 25% Unit sales of our 80286 and 80386 products increased by almost 100% Although sales of the Commodore 64 declined for the year, we nonetheless sold over 700,000 units. Europe remained our strongest geographical market segment, with sales increasing to over $660 million. During calendar year 1989, Commodore sold more personal computers in Europe than any other computer company except IBM. Our past marketing investments have led to siginificantly increased sales in many countries, most notably the United Kingdom, France and Benelux. Fiscal 1990 sales of $887 million declined 6% from the prior year. ... Fourth quarter sales increased 10% compared to the prior-year period. For the professional sector, we plan to extend the breadth of our product line with the introduction of a new family of PC compatibles including 80286, 80386 and 80486 computers. Further, we are entering the rapidly growing laptop market with the announcement this September of a notebook-style computer. In its successful bid to gain the 1996 Summer Olympics, the City of Atlanta used an Amiga to control an interactive multimedia tour of the proposed Olympic Village. Air forces are now using the Amiga in their flight simulators. In television, TF1, the largest television channel in France, uses Amiga computers in its production effort, while in Denmark, the Amiga is employed in a game show that provides interaction with the viewing audience. Amiga computers are also utilized to drive animated information displays, at sites as diverse as the Galleries Lafayette department store in Paris and the 40-foot animated scoreboard/television screen at Miami Stadium, site of Super Bowl XXIII. ********During fiscal 1990, over 550,000 Amiga 500 computers were sold, over 25% more than the prior year. The C64 family is the most popular line of home computers ever manufactured, with an installed base of nearly 11 million machines and a software library of more than 10,000 published titles. Although sales declined in fiscal 1990, over 700,000 computers were sold. The U.K. has been one of Commodore's most successful geographic markets over the last few years, as sales have grown by more than 400% since 1987 from a relatively small base. Now the U.K. is the company's third largest market worldwide, behind only Germany and the United States. Commodore holds a major position in the consumer sector, as sales of the Amiga 500 and C64 have increased dramatically. ... Sales promotions have been tied to the release of exciting new software, which is often packaged and sold with the computer. In the professional sector, sales are growing from a small base, with increasing PC compatible sales through the dealer channel, and professional Amiga sales to government organizations such as the Ministry of Defence and local police and fire brigades. In France, the growing demand for Amiga and PC compatible computers has helped support a 300% increase in revenues since 1987. In Benelux, sales are up 200% over the same period, led by growing PC sales to businesses and education. Significant opportunities are available in several other markets, as well as in Eastern Europe, where countries will be rebuilding their economies over the next several years. Our German company will serve an expanded market in unified Germany, and a network of distributors is being established to market products through the remained of Eastern Europe. CDTV: Commodore plans to market the player through its worldwide consumer sales force, and to sell it through upscale consumer electronics departments and stores for a suggested retail price of under $1,000. In addition to various interactive resource materials, a variety of instructional programs are planned in sports, cooking, foreign languages and special programs for children. Commodore expects to begin shipping the CDTV during Fiscal 1991 [i.e. by June 30, 1991]. The Amiga product line accounted for 53% of net sales during fiscal 1990 compared with 45% in fiscal 1989 and 41% in fiscal 1988. Unit sales of Amiga computers increased 26% in fiscal 1990, primarily attributable to the Amiga 500 and the introduction of the Amiga 3000 in the fourth quarter of fiscal 1990. Revenues ofed by 11% in fiscal 1990. Unit sales of Amiga products increased 19% in fiscal 1989 while revenues of the Amiga product line increased 15%. ...revenues of the C64 product line decreased 45% Geographically, Europe provided 75% of net sales compared with 69% of net sales in fiscal 1989 and 68% in fiscal 1988. Net sales in Europe increase 2% as significant increases in the United Kingdom, France, Italy, Belgium and the Netherlands ofset declines in Germany and Switzerland. North American sales declined 27% in fiscal 1990 and contributed 18% of fiscal 1990 net sales compared with 24% in fiscal 1989 and 26% in fiscal 1988. Asia/Australian sales decreased 8% in fiscal 1990 and accounted for 7% of net sales in fiscal 1990 and 1989 and 6% in fiscal 1988. The dollar value of sales for fiscal 1990 would have been approximately $8 million lower if prior year exchange rates had been in effect. ...Far Eastern countries where a large portion of components and peripheral products are sourced. Research and development expenditures increased 44% to $28 million in fiscal 1990 primarily as a result of new product development and expanded software development efforts. In fiscal 1989, research and development expenses increase 25% from fiscal 1988. During fiscal 1990, the Company's cash position decreaed to $78 million compared with $114 million at 30 June 1989. Due to significantly reduced profitability in 1990, cash used by operations was $3 million as compared with $46 million provided by operations in fiscal 1989. In March, 1990 the Company repaid $13 million of senior and subordinated notes as scheduled. Capital expenditures were $19 million in fiscal 1990 compared with $24 million in fiscal 1989. Fiscal 1990 capital improvements included equpiment to support research and development activities and production equpiment to upgrade the Hong Kong and semiconductor manufacturing facilities. The Company's financial position remains strong. Working capital at 30 June 1990 was $318 million, essentially unchanged from the prior year. Total shareholders' equity increased to $253 million at 30 June 1990 from $240 million in the prior year. The Company anticipates that its balances of cash and equivalents together with cash generated from operations and borrowing capabilities will be sufficient to meet future operating cash requirements. To the Shareholders of Commodore International Limited: We have audited the accompanying consolidated balance sheets of Commodore International Limited (a Bahamian corporation) and subsidiaries as of 30 June 1990 and 1989, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended 30 June 1990. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examinis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Commodore International Limited and subsidiaries as of 30 June 1990 and 1989, and the results of their operations and their cash flows for each of the three years in the period ended 30 June 1990, in conformity with generally accepted accounting principles. Signed: Arthur Andersen + Co. -- Ethan Ethan Solomita: es1@cunixb.cc.columbia.edu GorbachevAwards++; free (SovietUnion); IndependentRepublics += 15;
cmcmanis@stpeter.Eng.Sun.COM (Chuck McManis) (11/09/90)
Ethan Solomita writes: > Of Commodore's total revenues, 75% came from Europe. >North America, including Canada and the U.S., comes to only 18%. >Australia and the Far East represent 7%. >********During fiscal 1990, over 550,000 Amiga 500 computers were >sold, over 25% more than the prior year. Ok that's 99,000 new Amiga 500's in the US and Canada (approx) (550,000 * .18) Not exactly your banner year. probably about 600,000 Amigas in the North American market. -- --Chuck McManis Sun Microsystems uucp: {anywhere}!sun!cmcmanis BIX: <none> Internet: cmcmanis@Eng.Sun.COM These opinions are my own and no one elses, but you knew that didn't you. "I tell you this parrot is bleeding deceased!"
es1@cunixb.cc.columbia.edu (Ethan Solomita) (11/09/90)
In article <2388@exodus.Eng.Sun.COM> cmcmanis@stpeter.Eng.Sun.COM (Chuck McManis) writes: >Ok that's 99,000 new Amiga 500's in the US and Canada (approx) >(550,000 * .18) > >Not exactly your banner year. probably about 600,000 Amigas >in the North American market. > No, certainly not a banner year. Without Europe, Commodore would've gone bankrupt long ago. However, one thing to consider is that in the US a higher percentage of Amigas sold are higher end models than in Europe, where the Amiga sells tons of 500s. > >-- >--Chuck McManis Sun Microsystems >uucp: {anywhere}!sun!cmcmanis BIX: <none> Internet: cmcmanis@Eng.Sun.COM >These opinions are my own and no one elses, but you knew that didn't you. >"I tell you this parrot is bleeding deceased!" -- Ethan Ethan Solomita: es1@cunixb.cc.columbia.edu GorbachevAwards++; free (SovietUnion); IndependentRepublics += 15;