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Technology Stocks : Versant Technology (VSNT)
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To: nanocap who wrote (449)11/29/1999 3:09:00 PM
From: Daniel Chisholm  Read Replies (1) of 477
 
Hi nanocap,

Re: increasing R&D spending growth, I too have noticed that, and agree that it is a positive (actually necessary) trend for a software company to keep in the lead (assuming of course that it is not being wasted - however I have no reason to believe that). I was thinking along these same lines when I pointed out that perhaps they are neglecting their capital spending -- admittedly, it s hard to exactly divine what is really going on.

Re: Regarding A/R growth: you are wise to always monitor this number in a company this size. The DSO number was discussed on the last conference call and 90-100 days is the target range for the Company. Software companies typically have higher DSOs due to the natur of the industry and where sales fall within the quarter. Again, always a number to watch, but not one I'm concerned with at this point.

Did they explain any rationale as to why it would be OK to have 90-100 DSO? What is the chief reason for it? Unless sales are consistently falling at the end of the quarter, I don't understand how this could be a "healthy" state of affairs. I do note that ODIS seems to have about 80 DSO, and Oracle about 60 -- so perhaps you are right, and this is simply a normal characteristic of the industry. Still seems pretty horrible to me though! What a way to run (or be forced to run) a business!

- Daniel
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