I would guess that when allocating the purchase price, much of the cost is going towards intangibles. Rather than purchasing a lot of goodwill and amoritizing it over many years, I'm thinking that the new impairment of value FASB calls for the co. to write down that which can't clearly be identified as having true market value. This is supposition on my part, obviously.
Two additional thoughts: in writing down some R&D or technologies, the co. is being quite conservative in adding this to their balance sheet, and if the acquisition pans out to be meaningful, great, but if not, they've taken the hit.
Also, in pre-announcing their intent to take this charge, wouldn't the current market price reflect the brunt of this news? The earnings announcement isn't likely to shock anybody, at least as far as this charge goes. I'd think that if they show revenue and earnings growth in existing areas, the market could likely reward COHR then.
As far as why I was asking about some of the historical numbers, I'm trying to understand COHR and the industry it works within as fully as possible before parting w/ too much $. If you look at the co.'s sales and earnings history, steady growth in either are really didn't start until '93 or '94.
Call it an anal Peter Lynch thing, I guess, but the more comfortable I am w/ my understanding of the co.'s past and present, the more reliable the future becomes in my mind.
Thanks,
Khris
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