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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: Justa Werkenstiff who wrote (5109)	5/13/1999 4:41:00 AM
From: Lex Luther	Read Replies (1) of 15132

Justa, I agree totally with your perceptions of the conf. call and the Bloomberg article smelling. I was able to get into the conf. call even though I'm not an analyst and the guy from Needham was there. As a matter of fact Theodore ONeill from Needham is an idiot for making that statement after the conference call concerning SFAM's year 2000 revenue projections. The key thing that they left out of the article was that Richard Faubert clearly stated that their quarterly "break-even" revenue run rate was approx. $70 mil and once they reach the second half of 2000 their overall profit margin would be back to 14% to !6 % with gross margins of 44% to 46%. That was the goal that they were working towards. They also said that the merger costs would un somewhere between $50 to $70 mil.and about 50% of that total would be out of pocket cash. Most of these costs would be absorbed in the next quarterly report. CEO Faubert did not do a good job and the only one that sounded like he knew what he was talking about was Roger Marach who as you know is resigning for some "unknown" reason. Needham is a big Market Maker for SFAM so watch them very closely as they just upped their rating on the stock. Overall I was left with the perception that they (SFAM)are just being very conservative with their projections for the time being.They failed to give any backlog information and the analyst's didn't press the issue. The analysts also forgot to ask what the actual realtime employee headcount was. Nobody bothered asking what the current bookvalue was but they did get cash on hand as being $145 mil which is significant.Wait till they here AMAT's backlog next week! If that doesn't scare Richard Hill into taking them out then nothin will. Someone has been accumulating this stock over the last couple of weeks, so the next couple of days should be very interesting. Good Luck! Lex

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