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To: Carl Worth who wrote (31117)	9/18/2002 4:41:23 AM
From: Dale Baker	Respond to of 118717

ALGX's gross margins run pretty steady around 50%. They have SGA at $110 million, capex around $40 million and interest payments around $25 million. So they need $350 million revenues to break even with $175 million costs, to put it very simply. I won't include the fact that SGA has crept up along with sales so the margins may get worse as they grow. Analyst estimates for FY03 are $1.2 billion, or $300m per quarter (which I think is optimistic but we'll see). Hence the general view that FCF positive only kicks in by 2004. It's a race against the clock and their remaining credit lines. TWTC has 60% gross margins, SGA under $60m, similar interest payments and capex around $30m that is way down from earlier in the year. IT's the difference between projecting FCF positive and achieving it.