Tom, I had a good bit of fun revisiting the Q3 earnings projections.
Obviously I revised a few assumptions, some in line with current
information; and most pointedly, lowering the expectation of the Jun,
Jul, and Aug Suite 8 sales. I think the picture as a whole looks
quite attainable, but, of course, we'll just have to wait till 9/24 to
know for sure. For reference, look at my post #812 and A.Hayer's
#830.
Revised Assumptions:
1. Suite 8 sales booked for May were $37 M. Adjusted for channel
filling, I'll go with the information A.H. obtained from Q2's
conference call of a 30% increase over WP7 last year. Also, I'm
taking into account the $20 rebate. The rebate, if redeemed by all
purchaser's, will reduce the 50% increase in margin to 25%.
2. Suite 8 Professional version to ship in August. (I'll revise my
number to $15,000 M in line with the article posted recently by A.H.)
3. Specialty Suite effectiveness is still unknown, so just a
conservative guess of $5 M. Also I added a guess of $5 M to account
for foreign language sales. ( I believe these numbers could be higher
than shown.)
4. Revised Suite 7 revenue to include channel filling with 3.1, Mac
sales, and residual Suite 7 sales. (This number could be quite a bit
higher than shown also.)
5. Corporate Licensing - Expect an increase due to Suite 8. Maybe
total of $23 M.
6. Office for JAVA - Who knows for sure? (This turned out to be
prophetic.)
7. Graphics revenue assumption is same as Q2. A.H. indictated that Q3
& Q4 are typically strong for graphics sales. I'll project Q3 to be the same
as Q2,and save the big increase for Q4.
8. Gross Margin is held steady as percentage of revenue.
9. Administrative Expenses held steady by Q2 dollar cost. (See
assumption 9)
9. I'll revise advertising to $23 M be consistent with Q2 plus $3 M
extra for the network news time in June.
10. Tax estimate of 40%.
11. Q2 shown without the write-down of $113,674,000. (Also shown with
40% tax assumption.)
Corel Corporation
Projected Income Statement
Q3 1997
Sales - Productivity Q2 % Q3 %
WP Suite 8 37,000 36.8% 48,000 35.7%
WP Suite 8 Pro 0 0.0% 15,000 11.2%
Specialty Suites & Languages 0 0.0% 10,000 7.4%
WP Suite 7, 3.1, Mac Etc. 5,000 5.0% 10,000 7.4%
Corporate Licensing 17,000 16.9% 23,000 17.1%
Office for Java 13,000 12.9% 0 0.0%
Total Productivity Sales 72,000 71.7% 106,000 78.9%
Sales - Graphics Q2 % Q3 %
Draw, Ventura, Images, Cad, etc. 28,413 28.3% 28,413 21.1%
Total Sales 100,413 100.0% 134,413 100.0%
Cost of Sales 19,911 19.8% 26,614 19.8%
Gross Margin 80,502 80.2% 107,799 80.2%
Expenses 73,002 72.7% 75,000 55.8%
Income from operations 7,500 7.5% 32,799 24.4%
Taxes 3,000 3.0% 13,120 9.8%
Net Income 4,500 4.5% 19,680 14.6%
EPS Basic (60,082,000) ~ 0.07 0.33
EPS Fully Diluted (70,844,000) ~ 0.06 0.28
Up, Up, & Away!
Scott |
