| |
re: MASK TOOLING UP
all figures bolow are MASK (Align-Rite) related financials
ok, I digged a little deeper..
I did some financial's comaparisions : 95/3 equipment was $ 6.5 mi, 96/3 it was $8.5 mil. Total depreciation per annum was $ 1.7 mil. back then. Well, 97,3 eqipment was $ 22 mil., deprectiation for the year was $ 2.7 mil, 97,12 eqipment was $ 34.5 mill, depreciation for 9 months was $3 mill, normalized for 12 months would have been $4.2 million
You can calculate the average time to depreciate equipment fully by following balance sheet items. I did and arrived at ca. 6 years. Now look, from 95/3 to 96/3 eqipment jumped $ 2 million (net investment) - depreciation jumped $0,33 mil From 96/03 ro 97/03 eq jumped $ 13.5 million - depreciation jumped $1 mill. Fro 97/3 to 97/12 eq. jumped $12,5 million (net investment), depeciation jumped $1.5
million. At 95/03 we started at $ 6.5 million eqipment level.
We know that: (net investmentS)
95/03 -> $ 6.5 million -> D = $1.1 per year til (2001)
96/03 -> $ 2 million -> D = $0.33 per year til 2002 LINEAR
97/03 -> $ 13.5 million->D = $1 per year til 2003 LINEAR
97/12 -> $ 12.5 million->D = $1.5 per year til 2004 LINEAR
See this ? Financing available from depreciation is roughly $ 4 million per YEAR !. Cash 97/12 was 4.2 million. Now look at this: Initial depreciation was $1.1 million per year. From an interpolation we can assume that HALF of the $1.1 depreciation as for FY 1995 (1.1 million) could be attributed to eqipment installed prior to 1993. This is exactly what I mean, depreciation requirements for SOME OLD EQUIPMENT will fall off the table, I speculate something in the $0.5 million - 0.7 million average yearly depreciation would fall off the table EACH YEAR !!
So my inference from things above are: 0.6 million depreciation will be eliminated this summer. So I see this: 25 million new equipment will be done in 2 parts (summer 98 and 99). Since part of that is service (not depreciatable), let's assume that the contract is 16 million eqipment and 9 million service. The service will find its way into normal cost figures. 16 million eqipment over more than 1 year is in no way big for MASK and will not burn a hole into their pocket.
Depreciation requirements for 16 million would just be 2.6 million annually. Off this 0.6 million fall off the table each year, leaving 2 million on the table. See what I mean ?
Also Interest wouldn't be an issue: 4.2 million financed from annual depreciation, 4 million from cash on hand right now pays the first part of equipments. In the meantime the company can generate at least 8 million cash-flow again to pay for the 2nd tranche of eqipment. NO BANK LOAN NECESSARY.
This is ultra-conservative procurement. I didn*t even think of that before.
best wishes
CROSSY |
|
