A friend of mine spoke to Asa Lanum last Friday. He prepared a report on his conversation for circulation amongst his E-mail group. Although he has asked me not to post his name, he did give me permission to post the contents of his report:
ZITEL is getting restructured, recycled, rebuilt, renamed, according to Asa Lanum, President & CEO. The following is a reasonably accurate translation of words and summary of impressions gained in a forty-minute telephone interview on Friday December 17, 1999. Quotation marks are used symbolically, not to suggest a verbatim transcript.
Mr. Lanum?s long term view: ?We are fully aware of the company?s performance over the past many years, including both the missteps and the successful, insightful strategic decisions which have provided us with an extraordinar opportunity. The company?s involvement with Y2K software tools was a colossal misstep but not because of faulty technology. The market for our Y2K produsts was there and it was huge. The decision-makers in that market simply elected to perform the remediation and testing in-house through a laborious manual process. Our automated tools were relegated to dinosaur status.Fortunately. in the Spring of 1998, an acquisition was completed of three affiliated companies, now consolidated into Datametrics Systems Corp., a wholly owned subsidiary. That decision, not fully appreciated at the time, has proven to be a successful bet on the promise of the internet and its enabled industry called E-Commerce. Our produsts today address the broad spectrum of net (internt, intranet, extranet, ISP?s, ASP?s) participants concerned with E-Business management solutions. Those products support Unix, Sun Solaris, Linux, HP-UX, Compaq Q-64, Stratus VOS, IBM aix, and Sequent. The common denominator of our product offerings today is to optimize interactivity through automated performance analysis and correlated software.. It is our role today, and our goal for tomorrow to gain and maintain a leading position in both the detection and prevention of interactive data transmission anomalies, providing E-Commerce companies with reliability safe-guards. The rapid growth of participating companies in E-Commerce and their dependence upon seamless transmission in a keenly competitive environment is our target market. New products evolving from our current product base are planned for timely introduction over the next several months. It is not difficult to see another, or perhaps even two more, separate Zitel operating groups alongside of Datametrics in this growing and dynamic field. We are fully aware of our market opportunity, and have established an overall strategic business plan to achieve our goals. Some have noted a 30% growth rate projection by former management, if that is an accurate quote, we?d look upon it as the very lowest level of expectation?.
Mr. Lanum?s near term view: ?Quite properly, we?ve been asked many, many questions regarding our current financial status. We do recognize the leverage of available working capital. It is our belief that among the proposals under consideration, there is ample capital available. Since we do not feel immediate action is imperative, and since the stock price is at its current level, we are reluctant to proceed with a major financing at this time.In fact, we are comfortable in the expectation that internally generated cash will be miminally sufficient for execution of our plan. Our sales are expanding. A year ago, an order at the level of $100,000 was noteworthy, today we offer kudos to those salespeople bringing in orders at ~$400.000. Yes, we are involved in discussions with prospective customers for multi-million level orders. Further, as we gain market recognition for today?s products (Ms.Ellen Hancoch, CEO of rocketing Exodus Communications offered some complimentary comments in a recent Wall Street Journal (WSJ) article), the movers and shakers have begun what we call the rattle at the gate, the odd request for product documentation, the out-of-the-ordinary inquiry for 10-K & Proxy filings at the SEC etc.While there have been no direct overtures, we are sensitive to the sniff in the atmosphere of other entities and their motives. Now, lets review the highlights of the plan:
This plan represents an intense effort by both our Board of Directors and our management team.It is a plan which will be done by the numbers. Let me repeat ? by the numbers!. There is an exciting and golden opportunity within our grasp, and we intend to seize it, but with a formal plan, with target dates, with specific objectives involved in the project of systematic construction of a critical servive reliability element of the E-Commerce industry. First, we implemented a directive to double the sales force under the direction of our World Wide Sales Manager, David Greaves. David brings a combination of market and product savvy, integrity, and velvet-glove sales technique. He has met his numbers, both with sales growth, and salesmen growth.
Second, there will be a new Corporate name in the apparent effort of identifying who we are today, and where we?re going. Third, we will be announcing some additional designees for election to our board of directors, including some prominent names in the high-tech, internet, E-Commerce world. Our recent disclosure of the Board addition, Mr. Tsvi Gal, is symbolic of the top calibre expertise we shall welcome to the board. Fourth, we will keep our options open for key executives as our expansion plans provide opportunities; in the meantime we shall experience some benefit from austerity of both staff and space at the corporate headquarters.. Fifth, we will establish an ongoing inter-company strategic alliance program designed to leverage our in-house activity. Preliminary discussions have begun. Sixth, we have initiated preliminary talks with prospective corporate finance/investment/ M & A consultants. Repeat, we have a plan, and it will not be completed overnight. It will be done by the numbers!?
As Fox News is proud to proclaim, we report, you decide. The attribution above is not verbatim, but YR believes a fair characterization of Mr. Lanum?s remarks. There is always the concern for selective retention, a condition peculiar to a shareholder eager to hear a positive perspective and hearing best what your bias chooses?. The annual meeting is Feb 17, you may wish to attend. In the interim the phone number is 800 622-5020. Call Mr. Lanum and ask your own questions. . . . .
The author is an investor in Zitel securities. These comments are offered to friends, gratis, who may wish to review them. This is not an offer to sell, nor a solicitation to buy. Investors make their decisions against their own criteria, and tolerance for risk. The author does not seek, and will not accept compensation in any form. |
