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Technology Stocks : Gemstar Intl (GMST)
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To: Mike Buckley who wrote (6331)3/3/2004 12:24:44 PM
From: 100cfm  Read Replies (1) of 6516
 
Mike,

Pretty grim reading.<g>
The projected operating loss of 438 to 458M does include depreciation amortization which in 03 was 173M. This is a non cash expense. Using the 03 amount of 173M, the actual cash loss would be 265-285M not including write down of intangible assets which in 03 was 416M. The press release didn't mention that the operating income of 44-69M included write down of intangible assets. From your numbers there seems to only be aprox 300M left in intangible assets. The question is are they writing off the balance of the intangible assets? Another non-cash expense.

What I'm trying to determine with great difficulty is what is the company doing profit or loss wise without any of the non cash write offs. Revenues minus cost of goods,SGA, legal,intrest and taxes.

One quick calculation based on the 03 consolidated statement would be. (For Sat revs I'm using $40/mth * 236,000 subscribers)

878m revenues (assumming no decline in 04)
(113M) loss of satellite revs from sale to Echo Star
( 6M) intrest expense
( 42M) stock compensation
(885M) operating expenses (assuming 03 level)
_______

168M cash loss

To back into the 44-69M OP profit, I'm doing the following.

(168) cash loss
(175) A&D
______
373M in write offs

That leaves 60-80M more in unaccounted losses.
(433-458M OPloss-373M)

Are they losing 168M or 228-248M in cash this year.
Without knowing how much of intangible assetts they are writing off we can't get an answer.
I'll listen to the CC to see if they mention it.
Either way, not pretty.

If all the above makes no sense, it's OK cause it's made my head spin.<g>
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