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Technology Stocks : Andrea Electronics (AND) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (1296)	7/28/1998 9:04:00 PM
From: phbolton	Read Replies (1) \| Respond to of 1356

Inside the numbers: Over the past three quarters AND is averaging about $4.5 mil in revenues and about $1.5 mil in operating losses per quarter. Assuming a 50% gross margin (very generous) they need to hit $7.5 mil in revenues to break even and about $10 mil to make $0.50/share/year for a P/E of 20 at $10/share. Since their intercom biz is going to zero (by their own admission) they need to at least double the headset business to make it to the break even point. At a 30% or so gross margin they need to hit about $10 mil in revenues per quarter just to break even and this would require about a tripling in headset revenues. Analysis: Cost cutting is urgently needed or they go chapter 11 sooner rather than later. However, costs are actually rising with Lamar, Utah, rent and debt payments.