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Technology Stocks : Applied Magnetics Corp

APM 1.310

-8.4%

Nov 21 3:59 PM EST

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To: Think4Yourself who wrote (10923)	12/10/1997 2:19:00 AM
From: Gus	Read Replies (1) of 12298

Some back of the envelope numbers.... Per Lehman, WDC cut back its unit forecast for this quarter from 7.3 million units to 6.1 million units, or 1.2 million units... Using the 1996 industry average number of heads per DD of about 6.3 heads/dd... 1.2 million units X 6.3 = 7.6 million TFI and MR heads Using a 60/40 TFI/MR mix (?), the 7.6 million heads break down as ff: TFI = 4.6 million TFI heads (RDRT/APM's?? 1.1, 1.3 and APM's 1.7) MR = 3.0 million MR heads (RDRT's 1.3, APM's 2.1) Using an TFI ASP of $6-7 per head and MR ASP of $10-12 per head... TFI = 4.6 million units X $6-7 = $27.6-32.2 million in TFI revenues MR = 3.0 million units X $10-12 = $30.0-36.0 million in MR revenues So the WDC cutback of 1.2 million units works out to *very roughly* $27 to $32 million in TFI revenues + $30 to $36 million in MR revenues = $57 to $68 million in total head revenues, give or take 10%. A 30-35% sequential drop in quarterly APM revenues means... $122.8 M x 30-35% = $36.8 to $43.0 million drop in APM revenues *...so the potential RDRT exposure to the WDC cutbacks is about $20.2 to $31.2 million, give or take 10%, in combined MR/TFI revenues.* Anybody with better numbers? Some of these assumptions may already be outdated. Thanks. Gus

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