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Non-Tech : Any info about Iomega (IOM)?
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To: Brendan2012 who wrote (43062)1/10/1998 7:33:00 PM
From: Dale Stempson  Read Replies (1) of 58324
 
Re: Estimates

>>>Any suggestions on improving this model?<<<

Here are a few ideas for using your estimating method:

Unit Ratio - Iomega stated annualized capacity for Zip units at 14
million and Jaz units at 2 million. This represents a unit ratio of 7
to 1. Using this ratio as a guideline, and your 1.8 million Zip units
sold for Q3 number, then Jaz units sold could be estimated at 260
thousand.

Drive/Disk - Revenue - I think you're be a little high on Zip drive w/
disks combined price. You might consider lowering the amount to around
$155.

Jaz Revenue - Using the ratio and price from above, Jaz revenues could
then easily be determined and your revised model would look like this:

Zip 1,800,000 (drive w/disks combined) $155 ea $279 million
Jaz 260,000 (drive w/disks combined) $485 ea $126 million
Ditto $ 26 million
Q3 Total $431 million

Q4 Estimate - You've specified 2.75 million combo-units for Zip. Using
the 7 to 1 ratio, you might consider using 390 thousand combo-units
for Jaz. The result would look like this:

Zip 2,750,000 (drive w/disks combined) $155 ea $ 426 million
Jaz 390,000 (drive w/disks combined) $485 ea $ 189 million
Ditto $ 26 million
Q4 Total $ 641 million

Using your margin percentage estimates:

at 7.5% margin: 48 million net income: $0.175 EPS
at 8.0% margin: 51 million net income: $0.187 EPS

Good luck with your model.

Regards - Dale
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