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Technology Stocks : SCCO - Smith Corona -- Ignore unavailable to you. Want to Upgrade?

To: Scottey who wrote (5)	8/11/1999 12:26:00 PM
From: Brad	Read Replies (2) \| Respond to of 145

Scottey, What is the potential for SCCO? Consider this. If they can average $12 million in sales per quarter (which they have done consistently the past year) with a 10% Net Profit (as they were doing 18 months ago), that would be about $1.52 EPS over the course of a year. The Industry Average Multiple is 28 times Earnings. Obviously, a lot of things need to go well for the stock to reach that level. But are there indications that they might be moving in the right direction? 1) Gross Margins need to return to the 28% levels. Clearance inventory was gone at the end of the 3Q (Mar 31, 1999), so that should help the gross margin improve. How much it improves is important. 2) SGA Expenses (Overhead) have already been reduced to levels lower than they were 18 months ago. 3) Total Liabilities have been reduced by 20% over the past 12 months while Sales have remained constant. 4) Cash position nearly doubled in the last quarter. The next quarterly report (which should be included in the 10K report) will tell us a lot about where SCCO is going and if the new management might be returning SCCO to profitability. I've heard RUMORS that the report might come out much EARLIER than normal. I'm looking forward to it.