Jonathon,
Do you know how to calculate gross margins, taxes, and net margins? Your figures are wrong... I'm somebody, and I'm correcting your far-out math.
1998 Revenues Projection: $75 - 80 Million
Gross profits equal revenues after cost of sales. Due to the fact that Myriad will provide most of the revenues, and has very low margins (carol macintosh reported that they work with donut shop employees and the like), cost of sales will be great. If Myriad can pull 10 percent gross margins and FAMH is really pulling 30 percent gross (Ira statement) then... the new FAMH would have a new gross margin of about 12.5%. I'm assuming higher revenues, 80MM, and that FAMH revenues can increase to 10MM from existing offices.
Personally, I don't know how Ira could project 70 MM from Myriad, since only $38 MM of it is in long-term contracts. Talk about counting your chickens before they hatch. Reminds me of the 4th quarter/.09 prediction.. and that was made after the quarter had started, not nine months in advance.
80MM - 87.5% = 10 MM (average 12.5 percent gross margin)
10 MM - 5MM operating expenses = 5 MM
5MM - 30% income taxes of 1.5MM = 3.5MM
That's a best case scenario of course, assuming that they meet income projections (which they didn't last year), assuming operating expenses are that low, and that income taxes are relatively light.
The projections of 3.5 MM in net would give them less than .09 per share... of course, the interest payment on the newly assumed debt, new shares that may be issued for the NYC and California acquisitions, etc., need to be taken into account as well.
Maybe they could make .07 if they are really lucky...and creative. |
