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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (5109)	5/13/1999 4:41:00 AM
From: Lex Luther	Read Replies (1) \| Respond to of 15132

Justa, I agree totally with your perceptions of the conf. call and the Bloomberg article smelling. I was able to get into the conf. call even though I'm not an analyst and the guy from Needham was there. As a matter of fact Theodore ONeill from Needham is an idiot for making that statement after the conference call concerning SFAM's year 2000 revenue projections. The key thing that they left out of the article was that Richard Faubert clearly stated that their quarterly "break-even" revenue run rate was approx. $70 mil and once they reach the second half of 2000 their overall profit margin would be back to 14% to !6 % with gross margins of 44% to 46%. That was the goal that they were working towards. They also said that the merger costs would un somewhere between $50 to $70 mil.and about 50% of that total would be out of pocket cash. Most of these costs would be absorbed in the next quarterly report. CEO Faubert did not do a good job and the only one that sounded like he knew what he was talking about was Roger Marach who as you know is resigning for some "unknown" reason. Needham is a big Market Maker for SFAM so watch them very closely as they just upped their rating on the stock. Overall I was left with the perception that they (SFAM)are just being very conservative with their projections for the time being.They failed to give any backlog information and the analyst's didn't press the issue. The analysts also forgot to ask what the actual realtime employee headcount was. Nobody bothered asking what the current bookvalue was but they did get cash on hand as being $145 mil which is significant.Wait till they here AMAT's backlog next week! If that doesn't scare Richard Hill into taking them out then nothin will. Someone has been accumulating this stock over the last couple of weeks, so the next couple of days should be very interesting. Good Luck! Lex

To: Justa Werkenstiff who wrote (5109)	5/13/1999 5:09:00 AM
From: Lex Luther	Read Replies (3) \| Respond to of 15132

Justa, Keep this in mind, SFAM is better than a baby LAM especially if you combine them with NVLS and have the ability to grab a big piece of the projected copper market growth which is slated at $1.7 billion by the year 2003! Think of it like this: 1. Richard Hill has got to be smarter than us so wouldn't he want to combine the synergies of both companies, especially as it relates to being able to "package" the copper solution. 2. Say he uses the NVLS stock as currency and offers SFAM .50 to .60 a share of NVLS for each share of SFAM. That would be about $25 to $30 dollars per share for us, which by the way we wouldn't have to take a capial gain on if we just kept the NVLS stock. 3. by the year 2003 the combined revenues for both companies could easily climb to $2 bil when you factor in the bonus in revenue growth from cooper and 300mm. This would leave approx $200 to $300 mil in profits which translate to $4 to $6 EPS with approx 53 million shares outstanding of the new co. 4. This would translate into a stock price of somewhere around $120 to $200 based on todays valuation models. It could be higher! 5. As far fetched as this may seem SFAM and NVLS will never come close to achieving that type of growth on their own, but together they would be in a much better competitive environment against AMAT! Let's face it, AMAT's dominance is going to have a significant negative effect on everyone elses gross margins. 6. If NVLS and SFAM merge it would give them the ability to offer the same "Total Solutions" package that AMAT offers PLUS they would now have the "infrastructure" to support it. 7. This is what the analyst's should have been talking about at the conference call today. 8. I hope Richard Hill is smarter than I am, but maybe I should send him an e-mail and ask him! Take care, Lex