Despite their optimism, officials note that short sellers are punishing
the companys thinly traded stock for the short term. But they maintain that
should not be a long-term issue, as the short sellers will have to repurchase
the stock at prices company officials hope will be higher than the present
trading level.
The company also hopes to benefit from patent infringement suits it filed
earlier this year against Hitachi Ltd. (NYSE: HIT;
Paris: PHA)
and Seagate Technology Inc.
But it will take time so see whether Storage Computer has the financial
capability to carry out such litigation much longer.
In filings with the Securities and Exchange Commission, Storage Computer
notes that its manufacturing costs have increased
dramatically, while the cost of beefing up its sales force is another
financial strain. These increased expenses can be particularly painful after
a prolonged slowdown in revenues.
Annual sales slid from $37 million in 1997 to $17 million in 1998, $11
million in 1999, and $6.5 million in 2000; they are on pace to reach about $4
million in 2001. It remains to be seen whether the companys revenues
recognized from deferred sales will be enough to bump up the 2001
number.
Meanwhile, the company still has an $86 million market value, as the stock
languishes at around $5. Perhaps thanks to the conference call, Storage
Computers stock edged up 2.83 percent Thursday to close at $5.45.
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