Hi. Mr. F. Here's how they become profitable. Take an annual figure of $50 million and assume sales of of 8 mill, 10 mill, 12 mill and 20 mill, quarter by quarter. Assume 15% gross profit in the fourth quarter, which equals $3,000,000. Add $1,000,000 for licensing technology. Assume overhead is, as you suggest, cut back to $15 million, which is $3,750,000 per quarter. Result is a profit of $250,000 in the fourth quarter.
Godin said they would be profitable in the 3rd or 4th quarter. He didn't say that they would be profitable for the whole year.
As you can see, BII could be achieve profitability with annual sales of $50 mill. in 1999. By the way, I believe the sound cards will sell very well and will have a gross profit of more than 15%.
Comments, please. Z |
