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Technology Stocks : Adaptec (ADPT)
ADPT 18.62+14.1%Nov 21 9:30 AM EST
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To: Camron Rafizadeh who wrote (1553)4/1/1998 5:00:00 PM
From: Patient Engineer  Read Replies (1) of 5944
 
Camron, Re:"Calculating Overhead reduction:
1 billions * % 7 = 70 mils - (10 -> 12 mils) => 60 mils reduction"

Not quite right. The press release mentioned 200-250 people. Assume 200 people at $150K per year per head in total expenses. This results in an addition of $30M to pre-tax profits and roughly $20M in EPS after tax ($.16/share). Your math is in error because ADPT's overhead is just 40% of sales, so take 7% of $1B in sales times 40% expenses equals roughly $28M.
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