Gamma Earnings Contribution
Mason,
Gamma reported the following earnings for their fiscal year end 1998....
"HOUSTON, May 22, 1998-----Gamma Biologicals, Inc. (Amex: GBL) today
reported that, for the fiscal year ended March 31, 1998, the company earned $1,310,000 (28 cents per share – diluted) on net sales of $18, 254,000 compared with net income of $1,116,000 (24 cents per share – diluted) on net sales of $17,555,000 for the year ended March 31, 1997. Fiscal 1998 pretax income included $1,154,000 benefit related to the September 1997 fire at the company's facility."
"For the fourth quarter ended March 31, 1998, net income was $161,000 (three cents per share – diluted) on net sales of $4,414,000 compared with net income of $234,000 (five cents per share – diluted) on net sales of $4,516,000 for the same period last year."
It is my best guess that Immucor has cut expenses in the neighborhood of $2.8 million translating into a positive $700,000 quarterly impact on the bottom line. Given the fact that Gamma's SG&A expenses were negatively affecting the bottom line, lets assume that they were at breakeven when acquired by Immucor. Conservatively, the merger could add anywhere between $0.2 - $0.3 per quarter to Immucor's bottom line. Should Gamma repeat its past performance and generate $1,310,000 in net income there is some real upside potential even when considering the loan acquisition expense. Such a feat could produce $0.4 - $0.5 eps per quarter. The above calculations were based on outstanding shares of 7.5 to 8.0 million as I do not have that info readily available. Note - Please check my napkin math!
IMHO - I'd rather err on the conservative side but believe that we could be pleasantly surprised.
Regards,
Tom |
