Re: Conference call notes
Anticipate double digit growth
80% being done in-house in the US
100% from audits ALYD have done, they've found something wrong
40% sales from overseas
Add'l staff in France - Italy Germany soon
Europe and Brazilian marketplace will explode
Hoping for home runs off-shore
Significant interest in Pacific Rim: China and Malaysia
Expand beyond Y2K - language conversions
Growth based on sales effort, not price increase
Not seeing average price increase for Y2K work yet
Why not analysts coverage: went on road show
-- 100% theme, want life after 2000 evidence, not story
-- looked at 100s of companies
-- definitive acquisition within a month or so
SmartCode invented to bring people off the mainframe
-- used for Y2k then distributed network, minis, pcs
-- install networks, web-commerce, e-commerce telephony, call centers, data mining, data warehousing
ERP, supply chain management
EDS and Cambridge doing it
Trial 9/9 - Bob personally indemnified the company
Customer profile impressive
8 companies represent 50% of quarter, 7 were existing contracts
Why pick ALYD? 90% convinced in-house will not work. ALYD do it for a living and its hard.
Y2K is not just a technical issue. ALYD is only company that can do many languages on many platforms. Think evidence of problems in Feb March of '99 after trying to patch failures in Jan and Feb.
New VP of Sales, Rich McCann(?) of Kodak.
How does ALYD get paid? Hard to know how the quarter is going since never know when code will come in.
40% delivery, 40% when completed, 20% on acceptance
Q&A
Otto Grote: Derby Securities
Projecting Q4 for tax provision, 36% effective rate some IBT shielded
Overseas don't have luxary of doing it in-house
Euro: Not fixed like Y2K, good for bodies. Companies claiming life after Y2K is Euro are lying. Fundamentally different process.
Looking at e-commerce not Euro for future.
Bruce Vogenitz: Gardner-Lewis
Forecasting extremely difficult because of F100 companies give code whenever they want to. Say next week and could be in six weeks.
Diluted shares decreased because cancelled the treasury shares early in 2Q.
Sales cycle is shortening. Probably around 60 days.
Doing an audit for a large company. IT dept kicking and screaming things were fine. Begrudgingly gave ALYD 10,000 lines. ALYD found 3 showstopper errors. 6 other errors. IT wouldn't touch code again because sick of it. Threatened not to do other projects. Lawyers asked "Draft" be put on report for legal reasons. Code shelved so all those errors are just sitting there.
Damian Rinaldi - First Albany
Partner relationships
CPWR
Chuck Boris(?) - new head of strategic alliances
20 deals pendings for alliances with system integrators
?
Several deals for home runs 50-100M lines off-shore
Stuart Goldberg - ? Capital
Head count - 325 static
Any new offices? Italy and Germany
# lines of code remediated: Misleading to say since priced different
.40 COBOL, RPG/PL1 .55-.60 , .90-1.00 others
Not discounting anymore
See no increase coming in price this year
6-10 jobs end to end done this last q
Drivers of revenues: fixed price .85 of every dollar drops to bottom line
Talked to one company 300M lines and just doing an assessment; want one vendor. Could be a home run
42M lines YTD completed
- Jeff
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