You've made a few errors: 1) After the end of 4Q07 they spent approx. $27m of cash on 2 acquisitions. That brings TEV up to $130. 2) Solutions business appears to be dissolving to nothing. 3) they will have to spend some $ fixing the problem with DISH. I wish they would give a hint as to what that ticket is?
Also, why did they indicate that there is no organic growth in wireless datacomm? It seems they paid some fancy prices to acquire business with no growth.
Agree - Eggplant. On #1, do you know if they have included full revenue conribution from those businesses in their Q1 guidance? Not clear when they will close. I would typically take any acquisition they do and assuming it will destroy value up to 40% of the purchase price. So maybe the right analysis is to add $27mm to TEV, but add 60% of $27 to the valuation analysis.
The 10-Q gives some detail of the 2 deals: 3/16/2007 Aircept $19.0m 4/4/2007 SmartLink Radio Networks $8.1m Re: 1Q08 guidance: purchase accounting under gaap requires immediately consolidating the acquisitions at the time the transaction closes. CAMP mgt would have to be complete idiots to not include the acquisitions in guidance, as they certainly will be included in reported results, right? Annualized revenue effect in 1Q08 for the 2 deals is only about $4m for both acquisitions.
The valuation effect of the 2 deals can not yet be known. Your methodology of assuming 40% value piss away for every deal seems suspect -- does the prior acquisition record by this mgt suggest as much? It looks like it just might! Except for the 2004 acquisition of Vytek, which they successfully paid for with $11 stock!
My bigger concern is the effect of these 2 deals on liquidity -- it looks like they spent all their excess cash right after qtr end, after they already knew DISH was blowing up as a customer. This worries me. There isn't much room left for error, and it appears that mgt does not yet know how big a problem the DISH situation will turn out to be -- or at least that's what they indicated on the conf call.