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Technology Stocks : Mattson Technology
MTSN 3.6000.0%May 12 5:00 PM EST
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To: LemurHouse who wrote (3285)2/2/2001 9:12:23 AM
From: Ian@SI  Read Replies (1) of 3661
 
AD,

Sounds like it's time for a call to MTSN.

The Steag $200M, which was mostly AR ( I think on the call, it was stated as either about $120M or $140M in AR)
is for sales made during 2000; and that, I believe would be included in Steag's sales for 2000. The asset is coming to MTSN only because of a clause in the purchase agreement.

I believe that MTSN's forecast of $600M revenue for 2001:

1. Was a conservative estimate given the downturn and current pessimistic outlook.
2. Has nothing whatsoever to do with the Steag windfall. One doesn't count the same sale twice. At least not legally.
3. The Steag number will improve the balance sheet only (to the extent that it's AR for product already sold, signed, sealed and delivered.

In other words, once we see an updated balance sheet, MTSN is likely to have about $10/share (based on 35M shares outstanding) Cash. This is somewhat overly optimistic as it presumes all $200m will be collected and that none of it will be required to add to WIP inventory, etc.

And one other point. I believe that SAB 101 only affects when revenue is recognized and does not have any impact whatsoever on when costs are incurred and recognized in the financial statement. So we'll see the costs go through as the sales are made and products delivered. Revenues corresponding to those costs will be deferred until the product is finally accepted. If this understanding is true, it's not consistent with current Accounting principles and practices; and will take some 'getting used to'.

Ian.
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