The thing that worries me is all the new shares they are issuing. We went from 16 million shares to 24 million shares in just a short time. All this dilution is going to make it hard on the co. to make decent earnings per share. Also why didn't they release a news report about their 10k being released? They released news about their bundling agreement with compaq why not throw it in there so you don't have to spend more money issuing another release. The only reason they wouldn't put out a news release about it(This is my speculation)is that they thought it was bad news and didn't want people to know about it.
Now ---with all that said......
lets try to make sense of this report....
From their previous news release they said fourth quarter sales were 600,000. Which is a great improvement. First quarter sales were over 600,000 with a month to go so we will play it safe and say first quarter sales are 900,000(march april may)using the same growth rate for the rest of the year we would get
1st quarter-------900,000
2nd quarter-----1,000,000 this is higher for sesonality(christmas)
3rd quarter-----1,500,000 which is typicly a better 1/4 for
4th quarter-----1,300,000 software companies
year 99 total---4,800,000
Ok now that was sales lets look at expenses the main one being selling general and administrative expenses 3,056,408 last year. They said this number will increase as their sales increase. I'm assuming they took a little bit of a hit because of the restructuring so we will say 4,000,000 SGA expense for year 99. The second biggest is depreciation and amortization 1,270,708 last year. They said this number will increase as they introduce new products. This one is hard to figure out but we will assume they will only introduce 1 or 2 new products this year bringing this figure to 2,000,000----Now I personaly wouldn't use this number to base my EPS on because the co. is not really loosing this money They are just writing down the value of their software as it becomes older and not worth as much.
anyway-------we have 4,800,000 in sales for 99
4,000,000 in GSA
800,000 so that leaves an 800,000 profit assuming you don't use the depreciation of 2,000,000 or any interest expense or any research and development or uncollectable receivables or interest expense giving us 800,000/24,000,000=.0333 per share for fiscal year ending 1999. Thats not to bad |
