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To: Czechsinthemail who wrote (15451)	9/7/1998 12:33:00 AM
From: Yiqun Xie	Read Replies (1) \| Respond to of 17305

Yes, there is one time acquisition charge of $1.8M for the most recent quarter for LEVL. excluding the charge, the net margin for LEVL is 14% for Q2. The net margin is rising steadily from 11.5% in 97Q1 to 14% in 98Q2, while doubling revenue. It is still lower than that of PMCS and VTSS due to different business models. PMCS's net margin was rising from 25.3% in 97Q1 to 30.1% in 97Q4 and falling to 25% in 98Q2 again. The revenue growth for the 6-quarter period was 19% only. PMCS maintains high net margin due to its high gross margin (about 75%). VTSS maintains more than 30% net margin for two reasons: low SGA cost, being about 12% vs. LEVL's 21.5%; and fat interest income at more than 5% of revenue. Revenue growth for the 6-quarter period is 87.4%. VTSS's business model is quite impressive, however, the valuation is also significantly higher than that of LEVL. BRCM is too young to make a comparison. The P/E value of LEVL is the lowest in the group despite its low net margin. Use the closing price on Sept. 4, and assume the annual earnings as 4 times the most recent quarter earnings (excluding acquisition charge), the P/E ration is as: BRCM 94, LEVL 19, PMCS 28, and VTSS 38. Considering LEVL's high growth rate, I conclude that it is cheaper than others.