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Biotech / Medical : SNRS- Sunrise Technologies
SNRS 0.0000010000.0%Dec 12 9:30 AM EST
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To: WTMHouston who wrote (3991)8/8/2000 6:03:38 PM
From: kolo55   of 4140
 
I said I wouldn't be "surprised by a dollar a share earnings"

Key word is "surprised". That would be a upper end forecast in the probability band, but still possible.

You keyed in on the important parameter; Lehman is using only 10 eyes a week in their estimate. This is too conservative an estimate for a procedure that doesn't have the same surgical necessities as the Visix "slice 'n dice" procedure. Lets assume 22 eyes a week for a high side estimate...this is 12 incremental eyes per week. Assume that the incremental royalties flow right to the bottom line in the 2001 fiscal year. Let's use your number of 300 machines (averaged out over next year) in operation.

(300 machines x 12 incremental eyes x 50 weeks x $200 =

$36 million incremental royalties.

This is 80 cents a share, added to Lehman's base earnings 19 cent estimate, and you get close to a buck a share. Of course this is a high side estimate, but it wouldn't surprise me this is a possible outcome, although not the likely outcome.

Point is that Lehman's forecast is very very conservative. Based on the RB member's surveys of interest among eye docs across the country, I expect Lehman's forecast of the machine installation rate is also low. Couple that with the low procedures per week, then you get a low earnings forecast. But the earnings are highly leveraged to the number of procedures per week, something we don't have a good basis to predict. I think basing it on Lasik pattern greatly underestimates the actual rate we will see.

Paul
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