Yes. You could be right, could be improved earnings/revenues. Take a look at what SMSC said last quarter, and also note the comment re INTC's warrant to purchase an additional 10%:
During the first quarter, as previously announced, the Component Products Division saw
an increase in order-input rates and in the number of new PC motherboard designs that
incorporate the Division's I/O circuits. Typically, it is several months before these new
PC designs are actually manufactured by the Division's customers. As a result of these
design wins, the Component Products Division expects improved performance in the
second and third quarters, compared to the first quarter, as SMC ships I/O devices to
customers for these new PC motherboards.
In March 1997, the Company announced that Intel Corporation (Intel) had agreed to
make an equity investment in SMC. Under terms of agreements signed by the
companies, Intel and SMC will work cooperatively on the integration of new
semiconductor I/O integrated circuits into selected Intel PC motherboard designs
through the end of 1997. The two companies have also agreed to cooperate on a family
of proprietary low-pin-count I/O devices for future applications. Under the agreements,
Intel has purchased just under a 10% interest in SMC, buying approximately 1,540,000
shares of SMC's common stock directly from the Company at a price of $9.50 per share.
Intel also received a warrant to purchase an additional 10% interest in SMC and certain
anti-dilutive rights. |
