TGIS is investing for long term growth
Richard, the press release you cited has what I believe a good explanation for the temporary shortfall in estimated earnings.
Alex W. Young, President and Chief Operating Officer, added, "While increased spending on marketing has impacted current earnings, these activities are essential for long-term growth. Marketing related spending, including the investment in our Singapore office for future growth in the Asia/Pacific region, and the addition of specific industry expertise and resources in certain industry sectors, increased as a percentage of sales. However, Resultant productivity, as measured by gross margin percentage, has stayed within historical levels. We will continue our marketing investments and pursue core business expansions through internal product development and acquisitions. For example, Bermac Communications, Inc., a multimedia software company which focuses on sales process improvement and interactive training, was purchased in July."
Mr. Young elaborated, "Spending has been increased at Interlink Technologies to improve market awareness of its inventory software solution product and to increase the product's applicability to a broader base of customers." The press release also said "During the first nine months of 1996, the company invested cash to purchase its stock, acquire Bermac, and add CEO Center capacity, where workshops on business process improvement are held with prospective clients. |
