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Technology Stocks : Concurrent Computer (CCUR) -- Ignore unavailable to you. Want to Upgrade?

To: Randolph Gwirtzman who wrote (3504)	4/29/1998 2:59:00 PM
From: Arthur Tang	Read Replies (1) \| Respond to of 21143

Thank you, Randy. Your arguments are valid in estimating the earnings of CCUR based on the Q1 and Q2 results. Big mistake in abandoning hardware and going for software and VOD. VOD business is going to be late. Big order with SFA has the Seachange factor now. Time Warner orders are now fixing up the SFA settop boxes to handle digital TV if it happens. Having said that, CCUR still has many RTOS operating systems to sell. And they sold a few military and simulator computers. They need more of that plus new cpu for Hawk family products to replace every installed base. But we never talked about cutting overhead of R&D and other expenses for earnings. Growth is fine but cost effectiveness is more important for the company to make gains. So until the March 31 results are out, even $0.25 earnings is a serious problem. Better get to work fast. There could still be non operating income same as in 1997?

To: Randolph Gwirtzman who wrote (3504)	4/29/1998 4:36:00 PM
From: Randolph Gwirtzman	Read Replies (2) \| Respond to of 21143

This is a correction of my post 3504. My calculations reflected an incorrect profit margin in making my calculations. The revised numbers are: CCUR needs to generate about 7 million in revenue (given current profit margins) to generate a penny of earnings. Each of 1Q and 2Q earnings were 0.03, which leaves 0.44 to earn in the remaining quarters to get to 0.50. This would require revenues of approximately $308 million. Even assuming RT sales continue apace, this will bring required VOD earnings down to 0.38, requiring CCUR to generate about 266 million in revenues. These numbers don't account for leveraging of fixed costs, but presumably CCUR would have to gear up CAPEX for that kind of production anyway. Sorry for the mistake, but this strengthens the case against such a large EPS figure. My subsequent post regarding the Navy contract should be adjusted to show that at a valuation of 90 million, the contract would bring in about 0.12 in diluted EPS. Still fairly significant, and still doesn't account for tripling. Randy.