Genicom (GECM) Message Board

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Microcap & Penny Stocks : Genicom (GECM)

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To: mnm who wrote (43)	8/5/1997 8:16:00 PM
From: Brian G. Swift	of 231

I talked to CFO today about my model for the second half of the year. Look for a seasonal dip in revenues and eps for the Sept. qtr. and a strong q4. My model shows eps of $.19 for q3 and $.28 for q4 for a total of $.91 for the year, taxed at a 21% rate. About 500K to 600K of start up expenses are being charged per qtr. for the transition to the new service depot being set up in Louisville. This will end in the current qtr. They also expect service revenue to pick up by the 4th qtr. as well. If they are successful in completing the purchase of the mid range printer business from DEC, all these numbers will change. They have stated clearly that they won't do the deal unless it adds to earnings. It is my understanding that the business they intend to acquire will add another $100 million annually to sales. This will then be a $500 mil annual sales company with no analyst coverage from any major brokerage firms. This should change now that the stock is moving up and they will smell the potential for an equity offering after the acquisition to bring the debt/equity ratio to a more comfortable range.

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