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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (12483)	1/10/1998 4:58:00 PM
From: Yakov Lurye	Read Replies (1) \| Respond to of 25960

re: CYMI Earnings Zeev, Some time ago we'd discussed the increased headcount on this thread. The guesstimate consensus was that it would add about $3M to expenses. The $3M increase in expenses may not account for additional R&D investment into 193nm research which I, personally would consider healthy. On the other hand, last Q earnings were negatively impacted by $6M allocated for service warranties, design fixes, etc. These expenses are, hopefully, non-recurring. If these guesses are correct, even with flat production (same number of lasers shipped as in previous quarter), the pre-tax earnings should improve by $3M or 10c/share. Rising $/Y may or may not have a negative impact on revenues, depending on success of their hedging strategies. It is also true that good last Q earnings will not help much if the backlog deteriorates considerably. I appreciate and welcome your comments on this thread, but in all fairness, you should clearly state the fact that you are soliciting investments into your new venture. Indirectly, this makes your position somewhat biased. Regards, Y.

To: Zeev Hed who wrote (12483)	1/11/1998 5:55:00 PM
From: Scott Violette	Read Replies (2) \| Respond to of 25960

RE: Forecasts for 4Q97 Q: Scott, I have not done a detailed spread sheet analysis on CYMI's earning as function of number of lasers shipped, but I was wondering, did you factor in the explosion in head count that CYMI had in recent months? These are important to support future growth, but short term it might have a little negative impact on their bottom line. My spreadsheets are for the most part yearly based spreadsheets with assumptions lastly at least a year (like tax rate, depreciation, etc.). CYMI is a moving target so, I make corrections by hand. Last Quarter, there was a $1.5MM one time charge to increase reserves for the CIP program. To put in perspective, CYMI would have reported $0.28 EPS last quarter without the increased reserves. They also had a one time charge for moving into their new bigger plant and shuffling orders for customers. Hopefully, these are all truly ONE-time charges. That is why, I think CYMI will hit $0.30EPS this quarter. As for more manpower, I hope that is used to make more lasers. Should you consider it a variable cost that will be taken care of by making more lasers or a Fixed cost killing their margins? (CPA's out there save it. I know the strict definitions). I am sure that there will be a lot of training costs before the new people are productive but, I think that the additional lasers produced will dilute the effect of the new people. The CC will tell if there is a one time charge for training.