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Gold/Mining/Energy : Direct Focus Inc. (DFXI)
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To: trilobyte who wrote (670)10/21/2001 10:49:14 PM
From: whenitgoesup  Read Replies (1) of 768
 
I don't think the profit margin for Schwinn is very thick right now....maybe 20%? That doesn't sound like much, but when you take a long view and throw in DFXI's management, we can expect that to improve drastically in '02.

They did $4.3m in the last 2 weeks of Sept. with Schwinn...and stated that their commercial and retail division would double from 17% to 33% of revenue for the entire company....that division did 14.7 million last Q. Since Q4 is their best Q of the year...that means they could do $32m for the Q of which 50% would be Schwinn. At a GPM of 20%, that would just over $6m for the Q in Schwinn profit. With 36m shares out, that would be about 17c per share for Schwinn in profit next Q.

DFXI states that Schwinn will contribute $120m in rev. for next year. That would be $25m in profit at 20% Gross Profit Margin...that equates to 69c for FY'02.

All this is rough guessing, but you can see that if they can get the GPM up over next year...and if they are conservative in revenues (as they usually are)...we could be looking at close to an extra $1/share in extra earnings for next year. We could get close to $1.80 in earnings for this year....and close to $3 in earnings for next year.

All this is if the economy doesn't go into the toilet in the meantime.

Just playing with numbers....any other opinions are invited.

Cheers, Walt!
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