| Everyone will have their own "realistic assumptions", but the estimates and calcualtions below may provide a feel for what it will take to get the EPS up for the long hall. It sure seems very possible to me. |
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| History: |
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| Rate of sales before settlement |
1 |
Per Month |
| EPS before settlement |
$0.06 |
Per Year |
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| Assumptions: |
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| Licensing Capacity before settlement |
1 |
Per Month |
| Average license price nets EPS of |
$0.06 |
Per Year |
| Settlement yields Q EPS of |
$0.15 |
Quarter |
| Annual EPS settlement-extrapolation |
$0.60 |
minimum annual EPS target rate |
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| Post settlement improvement assumptions: |
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| Capacity - Alliacense # of employees |
1.5 |
multiple improvement in licensing rate |
| Capacity - Improved licensing processes and tools |
10.0% |
% improvement in licensing rate |
| Customers more willing to buy/cooperate. Same amount of work required just fewer delays. |
30.0% |
% improvement in licensing rate |
| License price improvement
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5.0 |
multiple improvement in average price |
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| Result net of improvements |
$0.64 |
Annual EPS estimate |
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By now Alliacense should have done a licensing rate analysis and taken action to increase licensing throughput. IMO they should have a target-licensing-rate that yields an EPS greater than the settlement yields - and then show some growth from Q to Q. IMO this is at least as important as the settlement outcome.
You can get a much bigger estimated improvement to post settlement EPS if you assume there currently are significant Customer Delays and that the amount of work that needs to be done to define and agree on the size and value of each infringement is small (this work shouldn't change much as a result of settlement).
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