Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Patrick Yo - Vincuri.
Patrick Yo - Vincuri
Good morning Sim. Good morning, Craig. Could I just get some clarity in terms of, of the inventory that you have reported on your balance sheet, how much of that actually is related now to flash memory and products containing flash memory?
Craig McHugh
Hi, Patrick. For competitive reasons we are not going to break it out down to the component level or the product level. I will share with you that right now our inventory is divided very close to the division of sales, with about 60% of our revenues coming from our PDE, about the same level it is in our inventories. If you look at our inventory make-up, about 43% is in raw materials, 2% in WIP, and about 55% in total inventory in finished goods.
Patrick Yo - Vincuri
Right. So the adjustment in inventory has basically taken the value of inventory back to what flash prices were at the end of the March quarter?
Craig McHugh
Yes, we took the appropriate write downs and as I said in the presentation, with our flash memory and also our inventory of flash memory players.
Patrick Yo - Vincuri
Right. Is the Company considering alternatives to manufacturing such as outsourcing and perhaps releasing a lot of the assets currently fixed assets on the balance sheet?
Craig McHugh
I tried to highlight today one of the key areas of focus for Creative right now is exploring strategic alternatives for our operations. The executive team is looking at all different strategies with regard to operations, because we believe we can improve not just our product availability but reduce our inventories, be able to reduce our exposure to inventory and be able to be more responsive to the market.
At the same time, of course, that potentially could free up working capital, as you noted.
Patrick Yo - Vincuri
And the target for this to be completed? Is it the next two quarters, or is there a timeline?
Craig McHugh
As we shared, right now our horizon for returning to profitability is the back half of the year. We are actively looking at each of our product categories. The first one we moved on of notable size was the refocusing of 3D Labs. We don't have a specific timeline for our decisions with each group in the operations but we are putting all of our efforts into these areas of focus right now. I think you are going to be seeing changes from Creative in our direction in the coming months.
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