Subj: Re: Financial Comments
Date: Thu, 3 Apr 1997 13:28:18 EST
From: Wesley0428
Message-ID: <19970403182800.NAA05550@ladder01.news.aol.com>
For starters, the financials are not really the story for this company at this stage.
It appears expenses were slightly higher than the Whale analyst expected. The operating loss for the full year, excluding the $1.1M non-cash expense lumped into R&D for the stock payment to Razeghi, was $1,976,859 vs. $1,850,000 forecast by Dick Lilly. So he appears to have a decent handle on things.
They ended the year with over $4M in cash. They found someone to finance much of their equipment (sale/leaseback) to the tune of over $3M. This is promising if it can be continued in helping to finance Phase II, since the biggest Phase II capital costs should be equipment (the existing cleanroom will support Phase II expansion). Given the near future potential of rapid growth and high margins, I like to see debt used to finance the business vs.
equity.
The Q4 loss, excluding non-recuring and non-cash charges was about $.21 vs. .18 for Q3. Again, not bad considering Q4 was a quarter of finalizing the new facility and focusing on that. The same could be said for Q1 of this year. I don't expect much financially for Q1 due to some slippage in the ramp up of the new facility (I'd say about 2 months). Sales have begun to ramp in Q1, but production really has not. That makes Q2 the one to look
forward to.
For Q1 I'm looking for product revenues of $250K and an operating loss of about $650K. For Q2 I look for revenues to at least quadruple, but for continuing operating losses. By Q3 we should be in the black. Assuming they do $7.5M in revenues for the year (and the warrants get exercised around the end of Q3), I'd be looking for about $.19 in earnings per share for the year. In 1998 I'd be looking for $1.37 pre-tax. These are basically wild
guesses until we get a couple of quarters results to chomp on.
Capacity shouldn't constrain these estimates. A single good wafer can generate $40 - 200K in revenues, depending on the packaging mix and yield. |
