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Technology Stocks : Identix (IDNX)
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To: Night Writer who wrote (5628)12/9/1997 12:28:00 AM
From: Loretta Fern  Read Replies (1) of 26039
 
I hate I to sober up your eps predictions but 50% product margins don't drop straight down to eps as your calculation shows. I am not an accountant, but the margins that are approx. 50% are gross margins. For the product side it is probably calculated as: Net product revenues minus cost of product revenue divided by Net product revenue. Cost of product revenue does not include R & D, or SG & A. That is how in fiscal year 1997 IDX with 26.5 million in product sales IDX didn't earn .50 cents per share as your formula would suggest. How much any contract contributes to the eps is dependent on many factors. The good news, in general the more product sold the more that drops to the bottom line (or eps).
Again, I am not an accountant, but believe my explanation though probably confusing is on the right track. Wendall probably could explain it in 25 words or less.
IDX: To infinity and beyond
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