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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: JEFF K who wrote (36241)	9/26/1998 4:27:00 PM
From: John Rieman	Respond to of 50808

Other CVD/SVCD MPEG-2 chips are availible from Luxsonor, Zoran, ESS says they have one, Windbond will have one, maybe UMC, maybe OAKT. In this Q, C-Cube sold over 700K CVD chips. It may have been higher. It's a good and bad thing. Every line that shut down to change over drew down VCD 2.0 chips 1st. They didn't order any more. C-Cube looses 2 weeks of production, in a 13 week Q. The new inventory is not built to the same level as the drawn down inventories. Net, you loose 30% production for each line that changes over, but just in the Q they change over. On the good side, 22% of all lines that produce C-Cube based VCD players will have switched to CVD cheaps by the end of this Q. Not many will shut down until after the Chinese New Year. They are entering their seasonal ramp. The ASPs on CVD are higher, but the price of VCD 2.0 is still falling. ASPs will stay in the $10-$11+ range(Blended VCD chip price) for the next six months. That is very good news.

To: JEFF K who wrote (36241)	9/26/1998 4:39:00 PM
From: Ron Mayer	Read Replies (2) \| Respond to of 50808

Re: Does any body else supply chips for CVD? Does anyone else's chips support CVD? Not that I've heard of. How about if I change the question to: "Can any body else supply chips for CVD?" * Technologically: Yes. I have seen one of the SVCD chips playing a movie from a CVD disc. * Legally: Maybe. I don't know if anyone looked into licencing issues for the CVD spec. * Politically: No. I don't expect Zoran, LuxSonor, AMLogic(?), ESS(?), Winbond(?), or any of the other SVCD companies to join the CVD camp unless it merges totally with SVCD. It'd be practically suicide to depend on a spec totally controlled by a competitor. Their interest rests in an open standard.

To: JEFF K who wrote (36241)	9/26/1998 5:06:00 PM
From: John Rieman	Read Replies (1) \| Respond to of 50808

C-Cube revenue and earnings estimate for Q3. These are just my thoughts...................... exchange2000.com Revenues: VCD 3.3M units worth between $33M and $36M, depending on product mix. DVD has run at or below $3M for 3 straight Qs. Finally a pick-up: $5m to $6M Divicom's sales were about $36M last Q, $41M in Q3.(includes $2M worth of C-Cube encoders that I don't count in Encoder Chips.) Settops were $9M, and should be close to $12M this Q, with SkyperfecTV ramping up, Canal + always does well in Q3, and the build to the Holiday season. Encoders were about $4.5M last Q. With the new single chips, ASPs have and will continue to drop. Let's just call it $4.5M in Q3. Total sales for Q3 = at least $95.5M. Take out $2M for reserves and C-Cube should report over $93.5M, 13% sequential growth. Potential areas that may do better are VCD, DVD, and encoders. Now to get to EPS: Revenue $93.5M COG 42M( 55% gross margins, down from 55.5%) Gross 51.5M R&D 19.1M SG&A 14.5M op income 17.9M other .6M Before tax $18.5M taxes 5.6M (30%) Net income $12.9M Share count...................... exchange2000.com 39.7M shares = $.325 per share. Hit all of the high numbers it could be $.36 EPS, but I don't think so. VCD is uncertain. If you would have ask me last January, I would have expected more than 4M units in Q3.