I know, I wasn't going to post. But I have to. My posts will be limited to my thoughts on the cc, so don't expect anything else from me until April 20.
For everyone on the call or who is going to listen to it, the point I was trying to make is that the estimate for Q1 2000 of $0.07 is a joke. They made $0.09 from operations in Q4 1999 (which included the inefficiencies of the fab). The saving from just the depreciation is going to be around $0.05 in Q1 2000. Notice that Jeff tried to Bash me on the call, but he only proved my point. He said depreciation savings were 600K per month. Well 600,000 X 3 = 1.8mm /22mm = $0.08. If you factor in that maybe half of the benefit shows up in Q1 2000, you are very close to my $0.05.
Now lets talk about the $6mm of other charges. Sure some of them are one time charges that were not incurred in Q4 1999, but some of them are an accrual of costs that were incurred in Q4 1999, that will not be incurred in Q1 2000. You pick the number, but if $2mm is the number, then that is another $0.09.
So you can see that $0.09 in Q4 1999, maybe $0.04 in Q1 2000 for depreciation savings, maybe $0.04 for other costs, maybe $0.02 for increased sales and better margins, and you can easily get $0.19 for untaxed Q1 2000 earnings. Sorry SNDV, but your $0.07 for Q1 2000 is a joke.
Jeffie, you want to model out 2000, then try these assumptions. Sales 145mm, gross margins starting at 42% in Q1 and going to 47% in Q4, R&D and SG&A at same percentages as 1999. I will let everyone do the math.
Also, is there anyone out there that thinks they are going to do nothing with the fab by June, when they will not need it anymore. I say they sell it. Who knows, maybe the gain is large enough to use up those big NOL's and they have to start reporting earnings on a fully taxed basis. After all, they did say on the call that they will evaluate the reserves every quarter.
Well those are my thoughts, talk to you on April 20.
SJO |
