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Non-Tech : GameTech Int'l. GMTC < SATELLITE Bingo and more >
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To: Silicon Trader who wrote (122)5/10/1998 11:25:00 PM
From: tgs59  Read Replies (1) of 400
 
Mrbigair,

STUA made a big mistake over in Great Britain a couple of years ago, lost a great deal of money trying to into electronics and then to top it off way over paid to buy Trade Products. Trade Products was a major producer of pull-tabs and STUA bought just prior to the significant decline in pull-tab sales. STUA works with a 30% - 32% gross margin and is paying 10% of sales out in interest.

The May interest payment will just about wipe out their cash position and they are still spending money to bring the McAllen plant fully on-line. They have a credit line agreement, but I looked over the restrictions and they are significant. I am not sure that STUA can meet the net worth provisions at this point.

STUA does not have the resources to grow at the pace that GMTC is setting.

tgs59
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