SDRC - Structural Dynamics Research Corp. Message Board

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Technology Stocks : SDRC - Structural Dynamics Research Corp.

SDRC 0.333

-0.6%

Feb 9 3:17 PM EST

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To: J. Patrick McMurray who wrote (806)	7/7/1998 3:11:00 PM
From: Jerry Rush	of 946

Llistened to the call again. Missed some things the first time. Laura C. asked about size of BIG PDM deal. I can't say accurately, but it was something like $ 2-4 million. (3 ?) N.A. shortfall was also about $2 million. Asia about the same $2 mill. short of expectations. At this time, they plan no cut-backs in sales, R&D or Service. In fact still expect to increase sales staff (others too?). Expenses will be up about 20% Revenues up only about 7%. This is where the shortfall really is, imo. J. V. of Merrill Lynch questioned them about losing market share in MCAD. Questionable whether they are or aren't. The only thing (per their statements) that might make Q-3 better than Q-2 is the Big PDM deal. I'm not sure about that. IF the deal is $3 million....and they make 19% margin (doubtful) it would only amount to $0.015 per share if the whole thing was booked in the qtr. The reason this relates as a larger loss is because they probably charged expenses for chasing this account. It wasn't just one Big PDM contract. Starting statements said, "Few large deals failed to close." So there was more than one. ... but one was larger than others. Other negatives: One said they would concentrate on costs... another said no cuts in planed increase in sales staff and implied R&D & Service would continue to be expanded. Additional competition coming on-line. Sales staff unable to close deals... they called it execution. Asia will be weaker ( but still growing. just not as much growth.) Possible positive: PDM "Out-of-Box" solution in works... perhaps 50% completed. Apparently a lesser product for smaller companies. Can't help but wonder if they will hold the news til the the next conference call on the 21st. Of if the deal is singed yet. Just my viewpoint... Jerry

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