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Technology Stocks : Wind River going up, up, up!
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To: James Connolly who wrote (7141)1/19/2000 2:43:00 AM
From: lkj  Read Replies (2) of 10309
 
James,

Can I make a couple changes to your assumptions?

2. This year (ending Jan 2000) WIND will take in about $5 million in I2O 7 royalties. This $5 million is made up of $3 million from LSI (750K minimum per quarter) and about $2 million from Intel. We know this from the last two CC's.

LSI only started paying $745K per quarter since the second quarter. The I2O income form Intel in the first 3 quarters were $363K, $408K, and $537K. Fidler mentioned the $5 million figure in the 2nd quarter CC. Intel will have to generate about $1.46 million in the 4 quarter to meet the $5 million target. I think a more likely number from Intel would be $750K for the 4th quarter, which gives us a total of $4.3 million for last year. Taking in account that the first quarter I2O income from Intel was actually the sum from that quarter and the quarter before. This would drop last year's I2O revenue to $4.2 million.

In the last CC, Fidler also said that LSI will exceed the $745/quarter minimum sometime this year. My model would be that:

Intel: $2 million I2O in calendar 1999, probably will show $6 million in calendar 2000. (Calendar year, not fiscal year.)

LSI: will show $4 million in 2000.

I think high growth rate of 200% is achievable early on, but will not last for 5 years. But still, WIND should be at a higher price based on I2O alone.

Khan
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