Re-Post of IGOMEGA estimates,Syquest news, Swan analysis:
>>Subj: !!!!!2Q ANALYSIS BELOW!!!!!!
Date: 96-06-16 18:29:54 EDT
From: IGOMEGA
Sorry about the title, but I thought I'd notify those of you that were
looking for some substance rather than fluff.
Number in 1,000’s.
Sales Estimate
1Q95 2Q95 3Q95 4Q95 1Q96 2Q96
Bern+ 20000 17000 15000 14000 9000 5000
Zip 1100 18130 47140 101220 162800 275000
Jaz 0 0 0 1580 22200 50000
Ditto 19000 20500 22560 32000 28000 28000
Total 40100 55630 84700 148800 222000 358000
1Q Rev's Daily Rate Quarterly
First 44 Days 1.75 157500
Last 46 Days 3.15 283696
2Q96 GM CGS
Bern+ 5000 30.0% 3500
Zip 275000 28.0% 198000
Jaz 50000 31.5% 34250
Ditto 28000 18.0% 22960
Total 358000 258710
Operating Exp: 71600 20%
SG&A 50120 14%
R&D 21480 6%
Operating Inc: 27690 8%
Interest: 1000
Taxes 10409 39%
Earnings 16281
#Shares 125803
EPS 0.13
A few notes:
KE said that Jaz and Zip were 185M in Q1, and that Jaz represented more than
10%. Since 10% of that total is 18.5, I used 22.2M (12%) in revenue for my
1Q Jaz estimate. Note also that KE said that they had gone 7M over budget on
Jaz and that it essentially broke even. From this, I derived that they
expected the cost to be 15.2M out of the 22.2M estimated. This means they
had expected gross margins of 31.5% on Jaz for 1Q and this is the number I am
using for Jaz. I came up with 50M in Jaz sales as I believe that ramp-up
will essentially parallel the Zip. Given that automation should be in full
swing for Jaz in 2Q I don’t see any exceptional difficulties like the ones
encountered in 1Q.
Zip Margins were easier to define this time around. We were told that the
gross margins Zip, Ditto, and Jaz were 58M, giving us a cost of goods sold of
164M. Of that CGS we know that the 22.2M Jaz sold had a CGS of 22.2M or
break-even. This leaves us with a cost of 141.8M for both Ditto and Zip, and
the following table for gross margins:
Ditto10.0% Zip29.3%
12.0% 29.0%
14.0% 28.7%
16.0% 28.3%
18.0% 28.0%
20.0% 27.6%
22.0% 27.3%
24.0% 27.0%
26.0% 26.6%
28.0% 26.3%
30.0% 25.9%
Zip margins are in a pretty tight range. I chose 28% with 18% ditto margins.
I was surprised to see that Zip wasn’t in the 30% range last quarter, and can
only assume that bulk discounts for disks must have played a part.
Zip Revenues weren’t quite so easy. Remember that sometime in February ‘96
the first million disks were sold, and by June 3, ‘96 the second million were
out the door. Taking the longest time frame possible, 4 months for 1M Zips,
gives us 250K shipped on average per month. Using a quick and dirty method
for 1Q we can figure out what the average daily Zip rate was. Aprox. 163M is
Zip revenue was achieved for 1Q (again assuming Jaz at 12%). With a tie
ratio of 10 and revenue of 10 per disk and 120 per drive, each drive pulls in
about 220 in revenue. Divide the 220 into 163M and we get a total of 741K
drives for the quarter or 247K per month which fits the low end of 250K per
month from the press release information. I know that the time frame for the
press release isn’t the same, but it is close enough to act as a double
check. Now, given the IMPX order in early January for 2 million read channel
chips (10 million order at a cost of $5 per chip) were to be delivered, and
the additional fact that IMPX actually delivers orders within 6 months, we
can subtract 750K units (rounding 741) from the 1Q numbers and pretty much
figure that IO plans to sell 1,250,000 drives for Q2. WOWZERS! Multiply the
1.25M times my 220 quick and dirty revenue number reveals an estimate for
275M in Zip revenues. Note that IMPX need not take the entire 6 months for
delivery, so it is possible that the order has already been delivered and
that this number could be higher.
<continued>Subj: !!!!!ANALYSIS PART II
Date: 96-06-16 18:31:06 EDT
From: IGOMEGA
I held ditto revenues constant at 28M to be conservative, even though the new
high-end ditto was introduced recently. I don’t have too many channel checks
or other information and thought this was the best way to go.
As a double check I used the outstanding receivable from end of 1Q to see
where I stand. Remember that Len Purkis told us that they had outstanding
receivable of 145M representing the last 46 days of the quarter. This means
that the daily sales rate at the end of 1Q was 3.152. Holding sales firm at
that rate gives us a quarterly rate of 284M. Since we know that significant
production automation was in the works at end of 1Q as well as through 2Q, my
estimate of 358M appears bullish, but not unnecessarily so. It also shows
that H&Q’s estimate (280M) is once again on the low end of the spectrum and
should be beaten easily.
On to expenses. Since I believe most of the hiring has been done, SG&A won’t
see the large jumps as in past quarters. I increased SG&A 17M to 50M over
previous quarter, which, IMHO is conservative. Io’s commitment to R&D seems
pretty firm. I decided to be very conservative here too and double it to 6%
of revenue. Because of equity and convertible financing I dropped the
interest to 1M and held taxes at 39%.
Final note: I got the shares outstanding from the SEC edgar database file
announcing the completion of the secondary and the current outstanding
shares. (I note this only because many spent more time on my shares
outstanding discrepancy than the actual analysis itself.)
I must admit that last time around I was reluctant to use the IMPX
information for my 1Q estimates becuase I just couldn’t imagine Zip sales
being that high. All my other estimates were very close. That’s what I get
for second guessing myself. Well it’s not going to happen this time.
Okay fellow Fools, tear it apart!
Patrick Grinsell
Subj: SYQT gets $20 million!
Date: 96-06-16 22:16:28 EDT
From: DaleVelk
Hard to belive but true.
<<Subj: SyQuest Completes $20 Million Private Financing
Date: 96-06-16 22:09:21 EDT
FREMONT, Calif.--(BUSINESS WIRE)--June 16, 1996--SyQuest
Technology, Inc. (NASDAQ: SYQT) today announced that it has
completed a $20 million convertible preferred stock financing with
institutional investors.
"This financing is an important step forward for SyQuest,
demonstrating the confidence of the financial community," said
Edward L. Marinaro, chairman of SyQuest. "The financial resources
now available will enable the company to begin rebuilding its equity
base and to invest in its future."
A maximum of 2,291,891 common shares can be issued on conversion
of the new SyQuest preferred stock, which constitutes 16.6 percent
of the common shares currently outstanding, after conversion. The
conversion price is 77 percent of the market price of the common
stock at the time of conversion, up to a maximum of $11 per share.
The company would be required to redeem any preferred stock
exceeding the 2,291,891-share limit at prices ranging from 110
percent to 130 percent of its original price.
Of the $20 million received in the financing, $15 million is
being held in an escrow account and can be drawn at any time for
operating expenses incurred after June 7, 1996, but cannot be used
for other purposes.
SyQuest said that, among other uses, the new financing was part
of the company's strategy to maintain its listing on the NASDAQ
National Stock Market. The company's net worth at March 31, 1996,
as reported in its most recent Form 10-Q filed with the Securities
and Exchange Commission (SEC) on May 14, 1996, was below the NASDAQ
National Stock Market's minimum requirement of $1 million.
The Company
SyQuest Technology, Inc. was founded in 1982 and has shipped more
than 2 million removable cartridge hard disk drive systems and more
than 9 million cartridges. SyQuest is headquartered in Fremont,
Calif., and maintains manufacturing facilities in Fremont and
Penang, Malaysia, with additional facilities in Colorado, Europe,
Japan and Singapore. The company offers removable Winchester
technology solutions for Windows 95, Windows, Windows NT, Apple
Macintosh, MS-DOS, UNIX, SGI SunOS and Novell platforms. SyQuest
common stock (SYQT) is publicly traded on the NASDAQ National Market
System. See SyQuest on the World Wide Web at syquest.com.
-0-
Note to Editors: Except for the historical information contained
herein, the matters presented in this news release are
forward-looking statements that involve risks and uncertainties,
detailed from time to time in the company's filings with the
Securities and Exchange Commission (SEC). In particular, see Forms
10-Q and 10-K as they are filed.
The SyQuest logo is a registered trademark of SyQuest Technology.
--30--gdr/sf* mg
CONTACT:
SyQuest Technology, Inc.
John W. Luhtala, 510/226-4000>>
<<
>>
Subj: Re:Swan as Zip Competition NOT
Date: 96-06-16 12:34:04 EDT
From: Dugasarc
I have seen the Swan info package.
They have two floppies. One is fixed!
The fixed floppy is used for servo tracks only. It contains servo info for
both the old 1.4 MB and the new Swan 130MB 3.5" floppy.
I think it is a clunky mechanism and cannot be made nearly as cheap as the
Zip.
I really think this one is a loser, technically speaking, and couple this
with the legal ranglings going on (some else comment here), this is one
competitor I do not worry about.
Matt Dugas<<
Ken |
