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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Camron Rafizadeh who wrote (1553)	4/1/1998 5:00:00 PM
From: Patient Engineer	Read Replies (1) \| Respond to of 5944

Camron, Re:"Calculating Overhead reduction: 1 billions * % 7 = 70 mils - (10 -> 12 mils) => 60 mils reduction" Not quite right. The press release mentioned 200-250 people. Assume 200 people at $150K per year per head in total expenses. This results in an addition of $30M to pre-tax profits and roughly $20M in EPS after tax ($.16/share). Your math is in error because ADPT's overhead is just 40% of sales, so take 7% of $1B in sales times 40% expenses equals roughly $28M.