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To: John F. Poteraske who wrote (632)	12/22/1997
From: Todd D. Wiener	Read Replies (2) \| Respond to of 886

Happy holidays to everyone. As promised, I have completed my analysis and estimate revision for SMTC. For the past few quarters, my estimates for FY98 and FY99 have been $1.95 and $2.65, respectively. It appears that SMTC should have no problem achieving the FY98 estimate. I am increasing both estimates slightly, to account for the positive effect of the ATE division. My estimate for Q4 is EPS of $0.58. That's net income of $4.7 million, based on revenues of $28.5 million. For FY99, I'm expecting EPS of $2.73 (39% increase), net income of $22.8 million (45% increase) and revenues of $131.5 million (28% increase). From FY98 to FY99: Gross margin increases from 47.7% to 50.1%. SG&A decreases from 16.3% of sales to 15.5% of sales. R&D increases from 8.8% of sales to 9.3% of sales. Operating margin increases from 22.5% to 25.3%. Net profit margin increases from 15.3% to 17.4%. Based on these estimates, SMTC is trading at 13 times next year's EPS. Todd