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Technology Stocks : Axcelis Technologies, Inc. (ACLS)
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To: EACarl who wrote (181)4/2/2009 12:14:07 AM
From: The Ox  Read Replies (1) of 195
 
Thanks, E!

I would expect operating expenses to fall in the current quarter and even more going forward. It just doesn't make any sense to have $30 Mil in operating expense when your revenue run rate is at about $40 Mil a quarter (and that might be a very generous revenue estimate for the next quarter or 3).

Here's something that you didn't seem to factor into your analysis. If we remove the one time inventory charge from cost of revenue in the 4th quarter, we actually see a gross profit of about $12 Mil (before expenses and one time charges).

Clearly, $30 Mil in operating expenses is still too high and doesn't cut it, imo. However, your loss estimate of $30Mil per quarter may also be way too high and should be more like $15Mil if they don't reduce their OpEx. But your main point still holds true whether the number is $15 or $30 Mil. They can't afford to lose that much money for very long, especially with so much of their assets/NWC tied up in inventory. Maybe they can show better numbers in the first quarter and reduce their burn rate from the numbers we are looking at?

Hard for me to guess which is the right answer: a) the company is denial about their marketplace going forward, b) they are simply running themselves into the ground, or c) they expect business to return much sooner then the rest of us and they feel they have to keep their staff in place to exploit the coming boom.

Too many things don't add up here, imo, (once again) unless they see a rebound in business that none of us are expecting. If this is the case, then they have to be prepared and this would justify the way they are running things these past couple of quarters. Once again, that is one big IF...to see a substantial rebound in orders sometime in the next 2 or 3 quarters!!

TO
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