Applied Magnetics Corp Message Board

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Technology Stocks : Applied Magnetics Corp

APM 1.141

+3.8%

Dec 18 3:59 PM EST

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To: Jonathan Bird who wrote (11087)	12/20/1997 4:01:00 PM
From: Mark Adams	Read Replies (1) of 12298

Keep in mind that Cash Flow and Profit are different. Cash Flow is usually much higher, due to depreciation of existing facilities. So financing upgrades via revenue isn't so far fetched. I agree with most of your explanations. I'd add that companies can show better return on equity by carrying some level of debt, and thats likely the reason APM is rolling over credit facilities. Hey, < 6% interest cost? It is true that carrying this type of leverage too far can lead to cash flow problems if loans are called, but it doesn't appear to me that this is the case here. However, in Korea, with debt 3x equity, it may be. Just some thoughts- and thanks for your efforts, Jon, Don and T Bowl.

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