Dr. Jeff and all: I was doing a little homework this morning, trying to anticipate the earnings for the quarter. What we do know is that Sales were $187.2 million. SG&A expense has been running about $48 million in recent quarters, and interest expense last quarter was about $2.5 million. I'm assuming these stay pretty much unchanged. Perhaps, SG&A is up a bit, and interest is down a bit if the debt was being paid down (according to last sales release).
That leaves the matter of cost of goods sold (i.e., margins). Same quarter last year, CGS was 52.76% of Sales. Last quarter, CGS was 62.59% of Sales. If we use the margin from last quarter, we have the following (numbers in millions):
Sales: $187.2
CGS: $117.2
Gr. Profit: $70
SG&A: $48.7
Interest: $ 2.5
Pretax Inc.: $18.8
Taxes: $7.5 (using RAYS rate from last year's same quarter)
Net Inc.: $11.3
Shares o/s: 55,363 (per last 10Q; can anyone confirm this?)
EPS: $0.20
This changes drastically if we use margins for this quarter last year:
Sales: $187.2
CGS: $98.8
Gr. Prof: $88.4
SG&A: $48.7
Interest: $2.5
Pretax Inc.: $37.2
Taxes: $14.9
Net Inc.: $22.3
EPS: $0.40
So, what are the margins? Summer margins typically are better, probably due to new models, etc. I checked the margins for the summer quarter 1995, and it was the same as for last summer (CGS=52%; Gross Margin=48%). My guess is that even if margins are not as good as last year's, they will beat those of last quarter. I'm sure prices on some old models were lowered in order to clear out inventory; however, there were several new, high margin models out, including the now famous Predator 2's. At roughly CGS=57% of Sales, RAYS gets its $0.30 (if my other assumptions are correct).
Any thoughts?
MAC |
