NT Accounting Software (GPSI, PSQL, SOTA, TMBS) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : NT Accounting Software (GPSI, PSQL, SOTA, TMBS)

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Jalali who wrote (79)	10/20/1997 12:09:00 PM
From: Alan A. Hicks	of 149

SOTA's Q3 revenues grew 48 percent over last year and beat EPS expectations by $0.02 at $0.11 for the quarter. Q3 is SOTA's weakest quarter but was still a record quarter. SOTA's results are yet another indication that the mid-range financial market is thriving. Business was particularly strong for the new MAS 90cs for NT product; services were up over 90 percent; and a new version of BusinessWorks provided growth of 58 percent. Although Acuity was behind expectations, management on the conference call said that the pipeline continues to show good growth with pent-up demand for Acuity Projects which will begin shipping in early November. Release 2.0, released at the very end of the Q3, is also expected to raise the average selling price for Acuity and with more modules now out, SOTA will be able to participate in many more deals. Cash grew $4.5 million during the quarter or about $0.38 per share. Deferred revenues have grown from $1 million at the beginning of the year to $4.8 million. These deferred revenues come from services revenues which are recognized over a full year even they customers pay for them up front. Notable comments in the conference call included Acuity moving to Visual Basic 5.0 in Q4 (probably be release 2.5). That should be well ahead of anyone else in the mid-range market. VB 5.0 will provide extensive internet capabilities to Acuity as well as much faster performance. (Microsoft claims about 20 times faster than VB 4.0). This will make three major releases of Acuity in 90 days. A number of new vertical partners for Acuity were also signed during the quarter but no details were given out. SOTA beat out PeopleSoft in the only deal they have been in with them. SOTA also made its first international sale with Acuity in England for a national lottery system. SOTA expects to begin setting up international distribution in England and Australia over the next several months. A new version of MAS90 with year 2000 support along with other functionality improvements will be also be released in Q4. Customers who buy a maintenance plan will be able to get this release. This should support strong services revenues again in Q4. A new MAS90 for UNIX supporting NT clients is also expected to be released in Q4. SOTA's UNIX customers have been waiting all year for this product. Management expects Q4 to be strong across all product lines while operating expenses should fall $2 to $300,000 from Q3 levels. Expenses were high in Q3 because of additional spending on consultants to complete Acuity 2.0, about $600,000 in marketing expenses for SOTA's annual reseller conference and some accrued expenses for fourth quarter bonuses. After the earnings report analyst Rob Kugel at First Albany raised SOTA to a "Buy" from neutral. Kugel expects $20.75 in revenues and $0.33 EPS in Q4 and projects 1998 revenues of $84.5 million and $0.95 in EPS. Robertson Stephens analyst Paul Dravos maintained his "Market Performer" rating. Dravos has $0.31 on $20.2 million in revenues for Q4 and projected $79 million in revenues and $0.83 EPS for 1998. Q4 earnings of $0.31 cents will represent a gain of over 120 percent over Q4 1996. In 1998 both Kugel and Dravos have quarterly earnings projections earnings up over 200 percent in Q1 and up well over 100 percent in Q2 and Q3. These kinds of earnings gains are likely to begin to attract momentum investors as SOTA breaks through to new all time highs above $20 per share. The company itself gave guidance of $80 to $88 million in revenues for next year. This level of revenues should support earnings in the $0.80 to $1.00 range. Management also indicated they were interested in making acquisitions with their strong cash position. Any acquisitions would add to revenues and probably in operating earnings as well. Interestingly, SOTA's Q3 results were almost exactly the same as GPSI's recent Q1 results. GPSI also reported $0.11 with expectations of $0.09. Revenues were $16.33 million for SOTA and $16.77 million for GPSI. SOTA has more product revenues but lags GPSI in services revenues. GPSI has trailing EPS of $0.41 with SOTA at $0.37. GPSI is expected to have calendar 1998 EPS of $0.70 versus SOTA's projected is EPS of $0.80 to $1.00. GPSI has two million more shares out and sells for $24 1/2 per share. It looks like its going to be a real horse race between these two leaders of the mid-range financial applications market. Jalali - It looks like TMBS is doing great also!

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next