Assuming it isn't done by exaggeration of SKS' range, I guess you can bridge the gap between my $50-55m and SKS' $60m by tilting the cash needs into Qs 1 and 2. That frees the second half to make more substantial contributions.
They'd need to be expecting an extra $5-10m in Qs 3 and 4 to get there, and in turn, that would entail a net cash inflow and, likely, a quarterly profit (assuming cashless items run around $2 1/2m per quarter).
"And so, what’s been interesting has been building the forecasting model where, if you do it from a top-down perspective, you can get to substantially higher numbers. When you do it from a bottoms-up perspective, in other words, you go ask all the sales guys what they think they can sell in the next year, it’s more in the $60 million range because they can’t yet see the effect of an external force changing their position. So, they can only look and say, look, it was this hard for me to sell something for the last year. It’s better today. But, I can’t afford to predict the incremental step change.
And so again, I’ll use the same example I used before, the self-encrypting drive business still represents only a couple percent of new machines shipping what drives. And yet we are about to see pressure on the OEMs to standardize in models because Microsoft is applying that pressure for an operating system that will ship some point in the future and our general consensus is in the fall timeframe.
So if people were to adhere to that pressure that drives are available, does that mean that it goes from 2% to 3% or does it go from 2% to 30%? I don’t know how to predict that. Now, at some point, I think we will be able to see indications of the supply chain, but it’s just the level of intelligence that I’m not quite sure that we have today on the actual order flow that’s going on in the rest of the world where I don’t have my finger on that pulse in a manner that gives us really clear indications yet."
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