Mitch,
I still do not think the one time charge, or Kraber's presentation of Q4 earnings, has much to do with Wind's current stock price. The kind of investors who blindly look at trailing earnings, not even taking into account one time charges, are not the type of long term investors who are going to ultimately drive Wind's stock price higher while limiting volatility. Wind's treatment of the one time charge is standard(remember, cash is not part of the income statement, so you can't take a charge against cash). The only thing investors should be concerned with is what potential benefits can be derived from the purchases. I thought management communicated the benefits fairly well in the conference call.
fyi, check out Seibel Systems as an example of another software company who had a similar writeoff last quarter and the stock has not been affected at all:
Total revenues for the fourth quarter of 1997 were $42.2 million, an increase of 168 percent from $15.7 million in the fourth
quarter of 1996. Operating loss, including a write-off of acquired research and development of $22.7 million, was $11.0
million or 26 percent of total revenues, down from income of $3.3 million, or 21 percent of total revenues, in the fourth quarter
of 1996. Net loss for the fourth quarter was $14.9 million or $0.43 per share, compared with net income of $2.5 million or
$0.06 per share for the fourth quarter of 1996. Pro forma operating income, excluding the write-off of acquired research and
development, was $11.8 million, or 28 percent of total revenues, up from $3.3 million, or 21 percent of total revenues, in the
fourth quarter of 1996. Pro forma net income was $7.8 million, or $0.19 per share, in the fourth quarter of 1997, as compared
to $2.5 million, or $0.06 per share, in the corresponding period of 1996, an increase of 208 percent. |
