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Non-Tech : GRIN (Grand Toys International Inc)
GRIN 27.400.0%Dec 5 9:30 AM EST
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To: Ron who wrote (173)4/23/1999 11:38:00 PM
From: Frank McVerry  Read Replies (1) of 495
 
Q1 earnings - my prediction.

Here is a very tentative earnings estimate for the upcoming Q1 report.
First, I started with the numbers given in the 1998 annual report.
(I hate the way tables display on this message board)

1998 1997 1996
% % %
Net sales 100.00 100.00 100.00
Cost of goods sold 66.57 60.59 58.57
Gross profit 33.43 39.41 41.43

Operating expenses:

SG & A 26.85 29.42 32.70
Loss (gain) on
foreign exchange 3.92 .83 (0.72)
Interest 2.11 1.47 1.91
Bad debt expense .44 .37 .97
Depreciation and
amortization .67 .37 .51
Total operating expense 33.99 32.46 35.37

Earnings (loss) before
income taxes (0.56) 6.96 6.06

Net earnings (loss) (0.96) 4.22% 2.14%

Now take the 1998 figures as a basis for the 99Q1 estimate but drop
the foreign exchange loss because of the improving exchange situation
and the fact that the company has no US$ balance (the '98 gross profit
should already reflect the lower CAN$ value. Also, average CAN$ value
for '98 is about equal to the present value of 67c). The 99Q1 earnings
should look something like:

1999 Q1 estimate %
Net sales 100.00
Cost of goods sold 66.57
Gross profit 33.43

Operating expenses:

Selling, general and administrative 26.85
Loss (gain) on foreign exchange 0.
Interest 2.11
Bad debt expense .44
Depreciation and amortization .67
Total operating expenses 30.07

Earnings (loss) before income taxes 3.36

Net earnings (loss) 1.64

Notes
* Net earnings for 96 and 97 do not appear to be a fixed percentage of
the gross earnings, so I took the average for these two years and used
this for the 99Q1 estimate.

* I see no strong reason to change the other operating expense items
so they remain the same.

* The 1998 Q1 sales were $4588511 and management says 99Q1 is
about 50% higher so net sales for Q1 would be 1.5 * 4,588,511 =
$6882766 and net earnings would be 1.64% of this = $112877
so net earnings per share would be 112877/1580000 = 7.1c

So my prediction is net earnings of 7c per share. This is lower than
the 98Q1 figure, due primarily to the difference in exchange rates
between the two periods which will produce tighter gross and net
profit margins.

FWIW
Frank
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