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Non-Tech : LL Knickerbocker(KNIC)/Pure Energy Corp

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To: Gerald Zubkoff who wrote (22)12/13/1996 3:42:00 PM
From: Juan Dominguez   of 1028
 
Gerald,

the jewelry acquisitions will take at least 2 more quarters before they are integrated into a profitable whole. But that is $30M worth of sales. The Georgetown Collection/Magic attic acquisition does not need any large scale integration because they are so profitable!! Georgetown Collection has 19% after-tax margins and Magic Attic has 21% after tax margins. The Marie Osmond, Funicello Bears etc. all have 28% Pre-tax margins. So if you include the "collectible" business with the jewelry the combined margin will fall around 13-17%, depending on any costs incurred to consolidate the Jewelry. Additionally, new products such as : Facial Steamer, Anushka, FloJO ,Richard Simmons etc. will also have high margins and pump the bottom line.

The "collectible" business will be run by the Georgetown Collection management which are top rate. So Marie Osmond dolls will finally have significant penetration in "Direct Response" arena. My projections are not "Hokus Pokus", they are based on my dismantling of the business into its component parts.

regards
Juan

PS.
Lets see how right or wrong I am for the 4thQ. Here are my projections:

Sales 27.3M
COGS 12.9
G.Prof 14.4

SGA 7.4
Prof/BT 7.0
NET INC 4.2
EPS $.25

YOU CAN MAKE FUN AT ME ,IF I'M WRONG.
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