Q.
Hi Pierre, What concerns are you aware of that printers have with the Heidelburg QM-DI 46-4 that would necessitate a backup order from Indigo for direct imaging printer....such a difference in types btw. Heidelburg and Indigo's printer. Is it the wait for delivery? Cost? Prst plates? They obviously choose Heidelburg as first choice for London site. What is their concern?
A.
A little bit of all of the above Neil. The big concern of all printers in general is technological obsolesence. They are concerned that new technologies like switchable polymers will far surpass PRST's technology. In the short run a lot of those who have ordered are concerned about the ongoing wash-up problems.
Q.
Just to clarify, the GTO-DI is also direct imaging from Heidelburg which I understand also uses PRST plates. Why did the printer switch from the QM-DI to the GTO-DI? Why the cancellation of 2nd install? Is it due to product quality, cost,another replacement already made due to year plus wait?
A.
The GTO-DI is a work horseand proven in the field. I don't know why the second printer cancelled his order completely.
Q.
Why is the Unidigital firm worried about "their QM-DIs"? Do they own them now? Why are any taking a "wait and see attitude"? A wait and see attitude about what? Which "other printers" that you referred to in prior post are also taking this approach and why?
A.
Worry caused by reported problems in Beta and Pre Series Units which has caused an almost 1 year delay in the commercial rollout.
Q.
What information do you have regarding the number of outstanding backup orders for the QM-DI and GTO-DI at this present time? Why do you have the thought that any cancellations are on a wider scale than what would be normal in retail sales?
A.
According to Tooker and other printers I talk to, the total order book for QM-DI's now stands at approximately 380, down from a post Drupa euphoric high of some 600. I am told that this is normal after big industrial trade shows.
Yesterday you posted your hope for a $0.13 second quarter. What assumptions are you using for Kit shipments in the Q? What is your Top line revenue?
I have just worked thru a spreadsheet using the companies numbers ie 190 + kits shipped between June 1995 and June 6, 1996 ( the day they issued their press release giving that number). Bob Verrando gave a friend of mine some shipment numbers last year which when you subtract from the 190+ kits shipped (lets call it 193 because if it was 195 or greater they would round it up to 200) and spread the remaining 100 over the balance of the year, produces shipments of 38 kits this quarter, down from 60 last quarter. Applying historical figures from last year and Q! 96 to arrive at average sales prices and royalties, and growing plate sales by 7.5% on the installed base quarter over quarter, the following estimate results. I have erred on the side of conservatism in estimating costs, saying that they can hold down their fixed costs and I used the highest gross margin achieved last year. Unless they have a new method of accounting or they are cooking the books( highly unlikely at this stage given the scrutiny they and the accountants are under due to the Q1 restatement, the lawsuits and the SEC), my revenue line comes in at $10.7MM, down from $11MM in Q1 and $0.05 in EPS vs $0.08 last Quarter. Ah but you will just say yes but compared to Q2 1995, these numbers look great with sales doubled and EPS up 5 fold. Unfortuneately for you the rest of the street doesn't take such a simplistic view, as a lot of weight will be put on the sequential numbers.
I would be really interested to see how you arrived at $0.13 when I have based my numbers on those supplied by the company!
P.S. Using the same formula my Q3 numbers are top line revenue of $12MM and EPS of $0.07. The respective numbers for Q4 are $12.3MM in revenues and $0.05 in EPS. At this point I'm sure that you have noticed that year over year EPS are actually down . For the full year that makes revenues of $46MM and eps of $0.24 which is only up by 70% and 33% respectively. If one were very generous one might apply a 33 multiple to those 24 cent eps and come up with a stock price of $8.00.
I would love to discuss this further with you. But remember these are based on numbers from the company and historical cost ratios and margins. |
