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Technology Stocks : edusoft (EDUSF)
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To: Sparky Beardslee who wrote (175)2/18/1998 10:10:00 PM
From: Frank Gasker  Read Replies (1) of 272
 
I'm not at all disappointed with results

Looks like q4 earnings impacted by 2 events
1. 67% increase in development costs (about .04/share) This is not a surprize, any impact as a result of the aggressive development of My First English will be well compensated by future earnings.

2. Marketing and sales increased 29%. (about .09/share) In my opinion this is the result of an increase in sales efforts as stated in the report. Also, Q4 was Latin America all the way. Degem has marketing rights for Edusoft products in Latin America. Edusoft pays sales commissions to Degem in the defined areas.

.10 + .04 + .09 = .23/share


My thoughts about 98 (Strickly guesswork)
1. q1 is generally a weak quarter for edusoft. Comparative results should be good. Latin America and Europe should be largest contributors.
2. q2 96 earnings will be tough to beat. Continued development costs may dampen earnings numbers but shouldn't matter. Might see the debut of My First English. Much enthusiasm around this product release. I feel it's warranted. While the present product line should show modest growth, the new release will boost revenues to 20+ mil in 99. It's important that Edusoft be first and technologically current with this release.
3. q3 Release here if not q2. Could see first revenue increases as a result. Earning could lag slightly.
4. q4 Easily record revenue quarter again. Earnings catch up.

Wild guess for 98 .60/ share on 15.5 mil
99 .95 share on 20.4 mil

I hope I can partake in the conference call.


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