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Non-Tech : SOLOMON-PAGE SYMBOL -SOLP-
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To: FIFO_kid2 who wrote (243)1/12/1998 7:12:00 PM
From: Gregory DeMoully  Read Replies (1) of 295
 
JJB,

I guess it makes a difference how you want to look at the numbers. Suppose we add back in the $250,000 charges to Q4 revenues for the doubtfull account and the startup of the new division. This would give us $693,690 in Q4 operating revenue. Divide by the diluted number of shares of 5,649,018 which uses the SFAS No. 128 rule which will come into play Q1 (will probably be slightly less shares Q1 due to the warrent buyback during Q1). This gives an estimate of 12 cents operating income per share for Q1. Add on top a conservative 20 percent annual growth rate (divided bo 4 to quarterize) and we get another cent. This is an estimate for Q1: 13 cents earnings per share before taxes. Looks like SOLP's tax rate is 30 percent. Multiply the 13 cents by 0.7 to give EPS after taxes. This changes the acutal EPS estimate for Q1 to 9 cents after taxes.

Is it normal for a company like SOLP to state EPS before or after taxes? Which number is the most significant? Is SOLP trying to pull a fast one by leaving out the taxes or are they only trying to create a more meaningfull comparison to the prior period where the effect of taxes was minimal? Does the SOLP peer group commonly state earnings before or after taxes? I don't have a very good feel for what is commonly accepted practice. Do you have any of this information?

Regards, Greg
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