LVCI's gross margin has never been 49%. That info must be a future projection.
10-Q says they acquired more equipment. Also, number of U.S. surgeons using their services jumped 31%, by 89, from April Q to July Q.
If LVCI's gross profit margin had stayed at April Q's level (which was highest percentage rate ever), they would have made over $0.07.
As they build volume on the new equipment, and absorb any additional costs, plus realize the benefit of RSR acquisition, they should make $0.10 per Q soon.
I still think they'll do $1.00 in CY99 (untaxed), but that's just my opinion. If they do an extra 15,000 procedures in CY99, at gross profit of $500 each, and SGA stays flat, that's an extra $0.75 to the bottom line, on top of maybe $0.40 run rate by late this year. With or without hyperopia. Untaxed. Unless other expenses go up more. LVCI gets average of maybe $750 per procedure, minus $250 Visx royalty, leaves around $500 gross profit from additional procedures, since other costs are basically fixed.
For a long time, I thought analysts were wrong about Visx's 1998 earnings. I thought $1.30 was way too low, based on procedure count. Now, the estimates are for over $2.00, closer to my estimate. Hopefully, I'm right this time too. |
