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To: Christiaan McDonald who wrote (3563)	5/1/1998 3:38:00 PM
From: stephen allen	Respond to of 21143

I agree they could earn $0.08 in the next quarter at $25 million, if they cut r&d for vod. That would be foolish, however, so I don't plan for such a gain, although the next q should beat last. I have developed a new, random yoga attitude. Everyone should be calm now. Trade with yourself. Do not come out. Anxiously await nothing next week. Market makers are day trading with money chasing stocks in a market. Meditate and you too can rise to level two, where you can handle your customers. Next week. Nothing will happen. Nobody knows what nothing is. (As well he should.)

To: Christiaan McDonald who wrote (3563)	5/1/1998 3:54:00 PM
From: Nimbus	Respond to of 21143

$56M Randy's calculated $7M/penny. ($62M in3Q and $.08 to date ... actually= $7.75M/penny, so to be precise they need another $62M not $56M). Jeff says the $ .16FY street estimate will be reduced in light of 3Q actuals. So a nickel in 4Q is likely the target (2.5x this quarter), just not sure how they will get there. That's why I asked him his thoughts.

To: Christiaan McDonald who wrote (3563)	5/1/1998 4:04:00 PM
From: Randolph Gwirtzman	Read Replies (2) \| Respond to of 21143

I'll take the heat for the $56 million number Ken. I think that was based upon my earlier post re: _extremely_ conservative figure of 0.01 of EPS per $7 million in revenue. After hearing some of the results of the call (that much of the VOD R&D has been accomplished), I would recalculate the required revenues as follows: Assume $10.5 million in overhead required for this quarter (this is based upon the 8.5 million run rate, with an estimated 25% increase for the fourth VOD quarter). This assumes no interest (which is insignificant given the net cash positive condition) and no "nonrecurring" charges. Assume 45% profit margins on VOD equipment and software. Assume 47% profit margins on RT equipment and service (overall profit margin from last quarter). Assume that RT equipment and service revenues are equal to those of last quarter (which may be generous, given the statement that sales are tailing off). Assume 30% tax rate. Assume 55,000,000 shares out (this may be high, but shares have risen by 5 million in each of the last two quarters). By my calculations, given the above assumptions you would need about $7.2 million in VOD revenue to hit 0.08 per share. This is over the $20.3 million in RT revenue which would match Q3, for total required 4Q revenue of $27.5 million. This model takes into account variable profit over fixed overhead. If I'm missing something here, please let me know. Thanks, Randy.