Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The New Iomega '2000' Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (3053)	10/4/1999 9:53:00 PM
From: HardMoney	Respond to of 5023

Please read the following 2 paragraphs from this afternoon's release, the 7th and 8th paragraphs in the release. >>>>>>>>>>>Based on preliminary analysis to date (1) and excluding the restructuring charge and the increase in the valuation allowance for its deferred tax assets described above, Iomega also said that it expects (2) a pre-tax loss for the quarter ended September 26, 1999 of approximately $5 million on revenues expected to be slightly higher than the $349 million reported in the second quarter of 1999. The expected third quarter pre-tax loss of approximately $5 million, while excluding the restructuring charge and increase in valuation allowance, (3)does include pre-tax, non-cash charges not directly related to the restructuring actions above of approximately $12 million. These other charges are expected to be recorded in order to reflect current estimates of the net realizable value of inventory, equipment, and other assets. In addition, Iomega said that it has not borrowed any funds under its $150 million Senior Secured Credit Facility during 1999 and that its (4)cash balances are expected to increase from $89 million at the end of the second quarter to over $130 million at the end of the third quarter. The Company said it has initiated discussions with its lenders regarding amendments to its Credit Facility, including a reduction in the amount of the Credit Facility (5) and a reduction in certain financial covenants, in order to more appropriately reflect Iomega's reduced financing needs and its expected net loss for the third quarter of 1999. >>>>>> Let's do some math shall we: IOM has 269,457,000 shares outstanding ....Let's round that to 270 Million. Therefore a gain or loss of $1,000,000 represents: 1/270=0.0037....a little more than a third ( 1/3 ) of a cent...... Now if IOM's operating pre-tax loss is -$5,000,000. the per share loss would be -$0.0185 rounded to -$0.02 per share. But wait......you have to add back in their $12,000,000 charge (3), to arrive at EPS before charges. 12/270= 0.044 rounded to 0.04 cents per share. So -0.02+0.04= + 0.02 ............... A 2 CENT GAIN I like # (4) above..........cash increased by 41 million even after the cash portion of the restructuring. #(5) IMHO can only mean IOM wants to by back shares, they must know that they are over the hump and are aware of various OEM deals that we are not privy to......something that would ensure the kind of cash buildup the company is seeing............$130,000,000 equates to 34 million shares 12 1/2% of IOM's outstanding shares.........if the disk cash cow is coming IOM could conceivably buy back a significant amount of shares...... I view the announcement positively.......do the math.......Mr. Dunn just announced Q3 earnings...........$0.02 cent gain before charges......beating the streets whisper of $0.00 by 2 cents....First call will label it a 200% earnings surprise. BTW if the intial charge turns out to be $25,000,000 instead of 30 that would be an addition 0.02 cents ...bringing IOM's Q3 gain to 0.04 cents a share In addition a would think that some of the consolidation type charges will be money saved which will just drop down to the bottom line in quarters to come...............But 1 question lingers even more now.....Why did Glore quit/get fired? PS I also like IOM's increased radio advertizing here in NYC. FWIW, Frank