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.

Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: NightOwl who wrote (77743)	8/19/2001 11:26:07 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 93625

Nigthowl, I have taken the projections of RMTR, they provided the following "looking forward" projections": Revenue for the third quarter ending September 30, 2001 is currently anticipated to increase to between $7 million and $8 million, due primarily to anticipated increases in shipments toward Ramtron's volume purchase agreement with Ampy Automation, as well as expected increases in development fees. -- Total costs and expenses for the third quarter are expected to be between $11.5 million and $12.5 million. Costs and expenses fluctuate over time, primarily due to product revenue volume and intermittent non-recurring engineering charges for the development of new products. Thus assuming $7.5 MM in revenues and $12 MM in expenses results in $4.5 MM in losses. Since they have only $.65 MM in accounts receivable, and they expect to ship $8 MM in the quarter, I assume that at least $2.5 MM in additional working capital will be required (that ill put their DSO at 30 days, outstanding and unheard of), and since they have so much inventory on hand (more than a quarter of sales), I assume no increase in inventories, that still present for this quarter a "cash nut" of at least $7 MM. They cannot drain cash to zero (most companies have actual cash on hand for 6 weeks of operations, or liabilities, the rest in short term investments). Mind you, in the first six months, they burned about $14 MM, so the rate I suggest is not that far from that. I think that there is a "clear and present danger" that RMTR will not survive this slowdown. Technically, the stocks indicates a similar "opinion", thus the "death spiral terminology. If you are close to management make sure they do not go the route of the floorless. I noted that Castle and Creek owns some stock, and if they approach them for "convertible debt", CC are very well known for going the floorless route . Zeev Zeev