Surprised by their conservativeness. If there's a Mitsu win settlement this year, I keep coming up with $.50+ just from interest earnings and hefty one time royalty settlements plus burgeoning recurring royalties. If they can slap Mitsu plus lock in the other 8mm camcorder manufacturers, they'd hardly even need eps from DST, which can be quite significant anyway!
See page 23 of 10K, Excluding royalties, one time expenses,
"operating income would have been 14.4M (96), 10.1M (95), and 8.9M (94). This year over year improvement in (adjusted) operating income reflects the effects of gross profit of the co. restructuring activities, its improved sales mix of products and continued controls on recurring selling and administrative expenses."
If DST can take off, they've got a low base of fixed costs off of which to boom eps. See how they're hiring 4 DST salesmen for 4 regions of country. They're slowly adding to their workforce, targeting KM R&D and DST sales. If they can tack on sales of DST/instrumentation of 10/20M this year, that would boost eps considerably I think.
bottom line- I still think, with increasing conviction, that with a Mitsu win and payback of litigation fees (which AXC predicts will rise to a running total of about 9M by first half of this year, and which there's a distinct possibility of Mitsu finally blinking and negotiating out of court, 10K says is possible) and good DST results, that eps can be in 80 cent range this year. I'm assuming the 1Q will be a bummer due to very low inventories, the heavy litigation costs, and switchover from the x10 line to the doubled density x12 DST line, but once 2Q takes off- watch out!
Ever (most of the time) hopeful James. |
