Re: IMPX earnings...
In a turnaround situation as hardcore as this I think looking at
the sequential quarters is a lot more important than looking at
the same quarter a year ago since a lot of the cost cuts happened
in the last 2-3 quarters, not all at once in Q4. In that regard
the numbers are OK - not great but the picture is improving
gradually. Expense cuts continue and are essentially being used
to fund additional R&D.
Gains on this stock will probably happen the old fashioned way -
slow but steady. In a fast market many people will tend to keep
their money on the sidelines on this one until the new products
start bearing fruit.
While the expense cuts look good revenue is not keeping up with
prior projections. Last quarter the company said that revenues
should start increasing again in Q4. That didn't happen - there
was a further drop of $0.4M (4%). The brake on top line growth
seems to be in part due to Asian exposure so it could be two more
quarters before we see a recovery on existing products. It's also
apparent that new products are critical to drive future growth.
The existing product set looks pretty anemic.
For new products IMP says they are introducing, and beginning
customer sampling, of their first power management circuit.
This will take several months to produce actual revenue. As for
payoff on the R&D, they say "over the next few months we should
begin to see first silicon on mask sets capable of generating up
to thirty new products." So, it's going to take some time to get
top line growth.
Check out the below table that compares last quarter's P&L with
this quarter. Again, I know seasonality exists but consecutive
quarters are important to look at when infrastructure is changing.
Three Months Ended
Mar 29, Dec 31,
1998 1997
Net revenues $ 8,995 $ 9,398
Cost of revenues 6,552 7,056
Research and development 1,993 2,400
R&D license fees 612 --
SG&A 707 965
Operating costs and expenses 9,864 10,421
Operating income (loss) (869) (1,023)
Interest and other expenses (net) (297) (117)
Income (loss) before provision for
income taxes (1,166) (1,140)
Provision for income taxes -- --
Net (loss) (1,166) (1,140)
Basic and diluted loss per share (.04) (.04)
Weighted average shares outstanding 28,247 28,246
Cost of revenue as % of revenue 72.8% 75.0%
SG&A as % of revenue 7.9% 10.3% |
