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Technology Stocks : Thermo Tech Technologies (TTRIF)
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To: Scott Levine who wrote (4280)6/6/1998 10:15:00 AM
From: Zeev Hed  Read Replies (2) of 6467
 
Scott, let us talk about valuation a little. The way I see it there will be about 7 plants operational during the next 12 months. Is this assumption correct?

Since in many cases (and frankly, I do not know the exact situation) these plants are not funded directly by TTRIF, but are JV'd, then only about half of the revenues accrue to TTRIF. Is this assumption correct?

Last, If memory serves an average plant will have total receipts of about $15 MM/year (once more if memory serves).

So, we are talking about sales rate of between $50 to $75 MM per year (the lower part if all plants are JV'd the higher figure if half are JV'd).

We really do not know yet if the profitability will be large or small. Each plant will bear a substantial interest and depreciation load affecting profitability until the debt is paid (assuming of course that financing is available). Thus, right now, the company seems to be valued at between 1 to 1.5 next year sales. This of course uses the company assertions and everyone should take this into account.

If the company indeed execute from here on, the current valuation is no longer excessive, that might be the reason some people are buying. Another buying source (up to about the 10th of June) would be some of the floorless converting some short (to possibly reset these when the stock goes back to 1.25 1.375?).

Zeev
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