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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lee who wrote (265)	2/17/2000 8:06:00 PM
From: Zeev Hed	Respond to of 30051

Steve, their current gross margins are about 43% and that could increase with volume, but they are at the initial stages of building their infrastructure with current SG&A and R&D at about $4 MM per quarter. If you assume that they will grow this further to about $6 MM/quarter, their break even point will be about $14 MM per quarter in sales. In my estimate they should reach that level within about 18 months. The "announced" target was $18.5 MM for the first year, but I think they will beat this hands down. I would guess that they could reach the $14 MM per quarter within another three quarters at the rate they are growing and signing distribution (reseller) deals right now. I think their Cabletron reseller (or even relabelled) deal is for $15 MM/year, but I am not sure, you'll need to go back to that news release a while ago. Zeev