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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

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Aug 24 5:00 PM EST

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To: George Dawson who wrote (12787)	12/1/1997 8:12:00 PM
From: Jay Quinty	Read Replies (2) of 29386

Help me out here people. I can't figure out why Broccade would need $20 million bucks if they've been so successful selling their switches. Using conservative numbers, if Broccade has shipped 12000 switches at an estimated port cost of $2000 per port, that would give them a one-year revenue stream of $24M. Assuming that they only have margins of 40%,then they have gross earnings of $9.6M(before SG&A expenses and fixed costs etc.) According to the press release, Broccade has grown their company to 90 employees, which is about the same size as ANCR. This should give them similar SG&A expenses to ANCR's, should't it???? It seems to me that using these numbers, flawed as they may be, Broccade should be in pretty good financial position. And since they've apparently been able to get lots of advertising for nothing, where is all their profit going. I'm no financial expert, so feel free to shoot holes in this. I'm sure I'm overlooking something. Could they need that money just to ramp up production?? Still lurking. Jay

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