LTX Corp. (LTXX) Message Board

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Technology Stocks : LTX Corp. (LTXX)

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To: Duane L. Olson who wrote (1793)	11/10/1999 5:16:00 PM
From: Logain Ablar	Read Replies (1) of 2126

Duane: The Gruntal analyst did a good job. This leaves room for the Needham report after earnings. A couple of fundamental points with the Gruntal analysis. 1) I'd expect higher sales. More than the 3.1 sequential increase developed by the analyst. Granted the company had cash constraints (note the high jump in accounts payable last quarter from 25M to 37M) and this may have impeded shipping product. 2) I expect a minimum of $60 million in sales. Remember the backlog incresed $14 million to 117 million. The $6.6 million increase would mean 12% sequential. Not as high as the 23% sequential from q3 to q4 and this leaves room on the upside for a surprise. 3) Last year we had a GAAP loss of $77.1 (pre tax of 1.1). Normally what happens if companies are allowed to book a deferred tax benefit for the loss and set up a deferred tax receivable on the balance sheet. I didn't see this on the reported financials (there are valid reasons why this may not be allowed and I assume LTXX fell into it, like they need to be assured they can generate the income to utilize the current net operating loss carryforward). Since LTXX did not book a deferred tax benefit they will be able to shelter income up to the $77M. So I don't think the analyst should be using the 35% tax rate this year. I'd have to read the statement tax footnotes to be positive on this. 4) Bookings. I'd expect higher bookings than the 67M posted last quarter. If revenue is @ $60 I'd expect bookings to be $75 (where we were in the 3rd quarter). A 1.25 book to bill. The whole sector is on fire with digital, dsp and soc's leading the explosion. Bodes well for LTXX. I do agree with her 25 price target but for different reasons. I expect higher earings but a lower multiple. Remember a stock is only worth what someone will pay for it. In this market today I see people willing to pay $25 before year end. This is my fundamental not technical opinion. Technically were getting extended now and need good news to move higher. I thought we would have sold off a little @ 19 but the whole sector is strong. Look at the other testers. Maybe TER will offer one of thier shares for one of ours <gg>. Have a good nite. Tim Tim

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