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Technology Stocks : RGFX Raster Graphics

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To: darren_ who wrote (112)	7/28/1997 10:13:00 PM
From: Sam Citron	of 593

CEO Call Notes 7/28/97 with Rak Kumar. Not a transcript, but a paraphrase. Q: Why did your stock go down after what seemed like a very good quarterly report in which you beat earnings estimates by 30%? A: I think that some of the analysts were looking for top line growth of 60%. We were partly at fault for that because when we came public 17 months ago we projected 60% growth in this time frame, rather than the 40% growth we are doing. I think we lost some credibility with H&Q and Prudential because of that. [No mention made of US dollar strength as a contributing cause] Q: During the conference call, you took pains to differentiate RGFX from the low throughput end-user market that ENCD and HWP are in. Who competes in the segment of the market that you are in? A: Xerox is the only other player in electrostatic and their technology is much older than ours. There's nobody else in piezo-electric [PE] right now, although there are rumors that Calcomp is developing a PE product. Our print heads are made by Nukote, which is also an ink seller. Our proprietary technology is in the paper transport and head alignment. The tricky part is the way you gang up the heads. We think we have a 12 to 24 month leadtime on the competition in this area. Q: Do you see the possibility of a stock buyback? A: It is a possibility if the stock weakens but we don't have plans for one now. Q: Do you feel you will need to raise additional cash next year? A: No, between what we have and what we expect to internally generate, we will have enough. Q: Why have you found it easier to penetrate the international market than the domestic market, in spite of the strength of the dollar? A: Here in the US where there is a huge homogenous language group, offset and screen printing can be more cost effective for high volume production runs. In Europe, where there are many different languages, our product is highly desireable. Q: What is your educational background? A: Bachelors degree in engineering at Indian Institute of Technology (IIT) Kanpur. Masters degree in engineering and MBA both at Canadian universities. Q: What have you done to cultivate Wall Street? A: Not much recently. We have been very busy with our new product introductions. We should do more in the months ahead to make ourselves better known to the investment community. Q: Thank you.

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