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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: DanZ who wrote (3810)	7/7/1998 12:48:00 AM
From: Linda Kaplan	Respond to of 6565

Geez. I'm speechless. You're amazing. I'm going to bed and hope I'm reborn with even half your intelligence. :-) Don't let Tom Veale see this. He'll give me another warning about falling in love with you. LOL! Linda

To: DanZ who wrote (3810)	7/7/1998 10:58:00 AM
From: Hashem Akbari	Read Replies (1) \| Respond to of 6565

Dan, If you recall, within the last two years, I have tried to develop a financial model for vlsi and post earnings. I was getting my information SOLELY from the company. The tragedy was, the information provided by the company's management was never accurate. My experience was that they talk from both side of their mouths. With that background, let me provide the following comments. 1. There is a chance that the RVNUs will be less that $140M as the company had indicated. This was the case in Q1 98. 2. COGS has a fixed component (operation of the facilities) and a variable component (cost related to per unit production). I doubt that VLSI can control the fix costs. And there is a chance that the variable cost per unit production may actually increase (economy of scale). 3. R&D during the last several years has been typically independent of the RVNUs. And it has been going up constantly. So there are some questions regarding your assumption there. 4. It is possible that they have tried to control G&A. Again, if the source of info is the company, the history suggests caution. All that said, my private forecast is $0.07. The sad news is, based on a sensitivity analysis that I do, the estimate can be up + $0.10 (that is an EPS of $0.17, very unlikely) or ARE YOU READY be down by -$0.15 (that is an EPA of -$0.08). The problem is, vlsi is operating at a very sensitive part of the financial model where fixed costs are a significant fraction of RVNUs. That make forecasting difficult, even if you were working with reliable data. To close it with a positive note, it appears that vlsi's investments in other companies are more lucrative and they will help the bottom line. Please also note that the company is not buying back its shares, at this time. Hashem