EN POINTE TECHNOLOGIES (ENPT) Message Board

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Technology Stocks : EN POINTE TECHNOLOGIES (ENPT)

ENPT 0.0001000

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Oct 8 5:00 PM EST

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To: Christopher Brainard who wrote (455)	4/29/1998 4:35:00 PM
From: Rob S.	Read Replies (1) of 537

An associate talked with En Pointe's new CFO today after the CC. He said that the company recognizes that it has screwed up financial reporting systems that really became a problem because attention was pulled away because of the AT&T phone outage problem. They had no redundancy in communications links in their extranet and generally sub-standard accounting practices. Summary: Acting like a chicken with it's head cut off. The stock buy-back is more show than anything else. The company has no intention of buying back a substantial number of shares unless the stock price drops considerably from the current price. Then the buy-back is expected to only off-set new shares entering the market through stock options given to employees. Net effect is nil except for any psychological effect of the hope that the company will support the stock price. Summary: take the cue from company management and sell out before the price drops further. After it drops to around 7, buy if you still believe management has a clue as to growing shareholder value. The company is between a rock and a hard place as far as it's historical business model is concerned. PC and portable prices have dropped like a ton of bricks and more and more companies are doing business direct. That puts a squeeze on ENPT's margins and sales. The plan is to transition the company into more value added categories of business. This is showing some results but will take considerable investment in personnel, facilities and development to make it work. Given the very dificult environment for hiring highly qualified people, this is a tough task to accomplish. ENPT faces serious competition that had come to the same conclusions earlier and is better prepared to contend with the new environment they sell into. Summary: expect continued soft sales and errosion of margins until the company is able to successfully transition the business model. This will result in a lower stock price over the next couple of quarters before there might be light at the end of the tunnel. If all goes well with the new biz model, the company could grow earnings substantially toward the end of the year and into next - big ifs given the current state of affairs. This puppy is heading down.

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