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Technology Stocks : Atmel - the trend is about to change -- Ignore unavailable to you. Want to Upgrade?

To: William Grady who wrote (8605)	7/19/1998 5:02:00 PM
From: Mark Adams	Respond to of 13565

That's a very nice observation you made. One I'd overlooked. Some of this debt growth resulted from recent aquistions? How many times does free cash flow cover the interest burden?

To: William Grady who wrote (8605)	7/19/1998 5:27:00 PM
From: Bald Man from Mars	Respond to of 13565

I am not concerned about anything except me making some money ...

To: William Grady who wrote (8605)	7/20/1998 5:55:00 PM
From: jeff s	Read Replies (1) \| Respond to of 13565

Regarding the long term debt issue: first, Cash and Long Term Investments were $316MM at June 30, giving a much bigger cushion. Second, the debentures for about $260MM are at very low interest rates for the first few years; significantly less then Atmel is getting on their cash. These will either convert in the future or be renegotiated at maturity if the stock price is not yet to the conversion price; essentially a bridge loan to the conversion at a very low rate. The majority of the rest of the debt is secured by equipment, is very long term, and has attractive repayment terms that optimize cash flow in the next few years. Atmel has very little bank debt that could normally be pulled at the breaking of a covenant. The company has been very smart about the nature and repayment terms of it's debt, minimizing the negative cash flow impact and allowing strategic acquisitions, aggressive R&D, and upgrades to manufacturing. In short, the balance sheet is in much better shape then a cursory glance would suggest.