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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Rob S. who wrote (7511)	3/23/1998 1:29:00 PM
From: Xianming Liu	Read Replies (1) \| Respond to of 11555

Rob: I really wish that IDTI could generate an (additional) EPS of $0.03 per share from 100 K units of C6 sales. IDTI will have to incur the costs of ramp up production and marketing and sales of C6. In addition, it has to pay its employee's salaries. Even if we can neglect these costs, I do not believe 100K C6 unit shipment could result in 0.03 EPS. Assuming average price of C6 is $65, which translates to about $6.5 M revenue. At 50% of gross margin, it generates $3.25 M gross profit from C6. Assuming a tax rate of 35%, IDTI will end up with $2.11 M net profit. Since IDTI has about 84 million shares outstanding (not just 69 M), it will only generate $0.025/share eps. Realistically, R&D and General administrative & selling costs could knock $1 Million off the gross profit. Then, 100 K C6 sale will only end up $0.017/share increment in eps <<Someone has gotten out their calculator! My figures check with yours - taking roughly 50% gross margin, 33% net on 100k+ diluted by 69 million shares gives you about 3c per share contribution. A lot of stuff that could turn up is not part of that simple equation but it should work pretty well due to management's intent to tighten costs.>>