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Technology Stocks : Trimble Navigation -- Ignore unavailable to you. Want to Upgrade?

To: Yin Shih who wrote (2584)	7/13/1998 5:08:00 AM
From: SKIP PAUL	Read Replies (1) \| Respond to of 3506

Trimble has shown consistent increase in sales. From the 60 million range per quarter to the 70 million range and now knocking on the 80 million range. Good progress considering the mass markets are not even here yet. The bottom line can be effected by Business development expenses such as opening the China office, volatile currency markets, and Developing new products so I dont think that it is a good indicator of progress or the lack thereof.

To: Yin Shih who wrote (2584)	7/13/1998 9:59:00 AM
From: Hockeyfan	Read Replies (2) \| Respond to of 3506

Leverage Scenario Unfortunately GAAP accounting requires that revenues and expenses be matched in the proper period. Inventory costs, including WIP, are not expensed through Cost of Goods Sold until the period that the finished products are actually sold, therefore you can not prepay inventory expenses. However, there is a phenomena called operating leverage where more of revenues carry to the bottom line after fixed costs are covered. Break even indicates that all fixed and variable costs were just covered and additional revenues should hit the bottom line at a rate HIGHER than the gross margin, adjusted for tax. Net, net, at 50% gross margin and 35% tax rate: $5 million X 50% X (1-35%)/23 million shares = 7 cents per share. As David pointed out, it would take 100% gross margin to reach 14 cents per share, which isn't likely. Could the VP who resigned be falling on his sword?