Simulation Sciences (SMCI) Message Board

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Technology Stocks : Simulation Sciences (SMCI)

SMCI 51.96

+3.2%

Oct 31 9:30 AM EST

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To: WTSherman who wrote (148)	2/16/1998 9:29:00 PM
From: Papril	Read Replies (2) of 183

>>>I'm also concerned about the R&D. Its a little hard to figure out how they had "unanticipated" expenses. I have to assume they this means they were using outside developers, under contract, for some or all the work and that the hours put in were higher than anticipated. If all the development were being done inside I don't see how the expense line would be any bigger. The project could have been delayed, but, expenses for salaries would have been the same. I'm still kind of mystified.... If anyone knows whether or not they are using outside developers for this it would assist alot. If they're not, then this sounds like smoke, to me... <<< WHen I spoke to the CFO, he mentioned something that made me think that the "unexpected R&D expenses" were related to this new contract that did not get signed by the cutoff of the quarter. The contract was expected to offset the expenses for the quarter and if it HAD been completed by the end of 4q, SMCI would have met the analysts numbers. Perhaps part of the contract actually WAS the additional R&D, and when it is signed, the R&D expenses for that customer will be absorbed by the contract. This is my guess.

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