Gegs,
Appreciative of your professional opinion on our TOPRO. Although I am sure your analysis is an educated one and very plausible, I would like to point out several contra-indicators to some of your appraisal on the negative points.
1. Y2k sector is generally service oriented. Y2k sector almost across the board has high multiples at present and has had for over a year. Although your experience in service side may hold up in other sectors, it does not seem to have been the case in the y2k sector. This would seem to bely your valuation of service focus specifically in y2k.
2. At any rate, IMO, Topro is going to be more product than service, at least in y2k. Why? Their present size and personnel growth plans for y2k do not indicate a major service strategy. Although service may initially serve to validate their reputation in the y2k arena, any exceptional y2k revenues will probably have to come from the widespread distribution of their CD methodology and a centralized back up of that methodology. This would seem to place product(CD) as the primary factor. In other words, TOPRO's success in the y2k marketplace would not rely upon a massive upscaling of hard to find specialty engineering personnel resources.
Agreed on contract announcements. Although they will serve to certify Topro's validity in the marketplace, in all likelyhood they will not specify bottom line income. But, CD distribution will because we have been informed of the business model for this product, and if CD distribution numbers are disclosed prior to quarterly reports, they will do much to allow a projected gauge of net return. These are the numbers that I will be looking for to determine potential.
As for your positive indications, I concur wholeheartedly.
JMHO.
Regards,
Gerry
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