EARNINGS, VENTURE RETURNS & RedChip Review Conference Recap
Earnings Press Release:
The company noted that the March 1997 quarter was an unusually strong quarter with results heavily influenced by one contract for the IBM facility in Manassas Virginia.
Message 4420703
===================================================================
VENTURE RETURNS E-MAIL NETWORK
===================================================================
Corvallis. May 11. KARL DROBNIC
Tava Technologies just announced their 3Q financials for quarter ended March 31.
- Revenues for quarter 3 are $11,667,000.
- Gross profit is $5.7 mil.
- Net income is $301,000
- EPS = $.02 basic, $.01 diluted.
- Revenue from Y2K for the quarter is $3,500,000.
- NMS status approved. Begins trading NMS on May 14.
- General Motors has expanded TAVA's role to include vendor management and component testing (the supply chain).
- Y2K Client list now exceeds 100 with 2,300 sites.
- Kraft contract: moved to remediation stage at manufacturing sites. Inventory & assessment at Kraft distribution centers begun.
- Jenkins: "We expect our service and software revenue to continue to grow as we face sharply accelerating demand."
===================================================================
FROM TAVA FAX RELEASE
===================================================================
Contributed by Kevin Durkin
- Hiring another 150 in next 90 days
- Dozen+ engagements for Solution Providers Partners (many signed or in final stage).
- Korea, Europe and Africa will provide TAVA with addtl pool of 1000+ for SPP.
- Price increases on new customers.
- Planning for 1999 has been concluded.
- New consulting Division formed. Headed by Tom Bruhn (previously with Raytheon Automated Systems). New Division will work with clients at the Executive level and provide the strategic manufacturing info technology plans required to integrate their ERP and supply chain management systems with process information systems.
TAVA|R.W. BECK
- In final stage negotiation on closure of SEVERAL MAJOR contracts.
- Developing partners to increase international coverage.
- Contributions from this partnership is expected in 1st QTR fiscal 1999.
==================================================================
RED CHIP REVIEW PRESENTATION & LUNCH WITH JENKINS
==================================================================
Contributed by Bonzo3 - AOL Motley Fool
Attended the RedChip Conference in Scottsdale, AZ today my hometown. TAVA presented at 3:00 pm local time. Prior to TAVA's presentation, I sat at the TAVA table for lunch and lo and behold who should sit down next to me about 30 seconds after I arrived? John Jenkins, CEO.
I did not miss an opportunity to ask questions and I can tell you I gained far more insight and useful information than I did from Jenkins actual presentation (which was quite good) several hours later. John Jenkins is polished, professional, cordial and extremely knowledgeable about his company and its business strategy. Seems to possess considerable technical knowledge as well as sales, marketing and financial competance. I was favorably impressed.
From my notes here were some of my questions and Jenkins answers (paraphrased):
Q - "After Y2K" do you envision a much larger Core S.I. business?
A - Yes, absolutely.
Q - Primarily from internally generated growth or through acquisitions?
A - Both
Q - Will the Y2K work stop at Year 2000?
A - No. Mission critical systems are being addressed now. "Triage" Other less critical systems will be addressed after Year 2000.
My comments: Mr. Jenkins does not feel that most companies have acted fast enough to correct all "mission critical" problems by Year 2000.
Q - What is the skill level of personnel employed by TAVA during Inventory & Assessment?
A - During I & A normally technicians and customers factory personnel.
Q - What is the skill level of personnel employed by TAVA during Remediation?
A - During Remediation degreed TAVA Engineers (System Analyst types).
Q - What does the process of remediation involve and what types of devices/systems are problems being found in?
A - Remediation could involve the Vendors/OEMs, factory personnel in addition to TAVA engineers. System replacement is possible, code remediation is also a possibility.
Each site, equipment, customer is different. Much custom code exists. Some with supporting documentation and source code, much without. TAVA will remediate code if necessary.
Problems could be as minor as Factory alarms, PC BIOS, Embedded Devices. They can exist in the Process Control level, Production Mgt. Level and the Plant Mgt. Level.
Q - Is the Wonderware CD distribution generating positive results, re; sales?
A - So far it has been mostly disappointing. It seems the CD's are not getting into the right hands. Factory level personnel instead of upper mgt. Although it has helped raise the level of awareness. We are getting better than anticipated results from our own direct sales force (CD Sales).
Q - Was the Birmingham Office opened primarily to support the Big 3 automakers or their supply chain?
A - No. It was opened because of Rust-Raytheon(?) My comment: He did admit that the Auto industry was another reason. And they were actively pursuing the supply chain.
Q- Rust-Raytheon?
A - (My notes are not clear at point) Yes they have been addressing the needs of the auto industry and TAVA wanted to be close to them and their personnel.
Additional comments Jenkins made at Lunch:
- TAVA sent two (2) engineers to Oil Rigs in the Saudi Gulf (Embedded Controller).
- Littons recent Utility Contract Win? He scoffed. Litton does not have a methodology to speak of. More of an Interview and Inventory approach. In fact TAVA has been contacted by Litton for TAVA to license their database.
- TAVA's database is now over 15,000 devices.
==================================================================
Contributed by Robert H. Richmond - May 9 1998 - SI
I agree with all that Joe said regarding our lunch with John Jenkins, but there are a few items we would like to add.
We met an almost out of breath John Jenkins running toward the dining room at the Red Chip Review. He had caught an early morning plane from San Diego and said he had been there all week working day and night, but he couldn't tell us what it was about. For the first of several times he said, "Just listen to the conference call."
Both my wife and I had the impression he was like the little boy who had a wonderful secret, but wasn't allowed to tell anyone.
We live in San Diego and I have an extensive business background in the area. The only company in the area that is large enough to attract TAVA is San Diego Gas and Electric now known as Enova. It is the third largest electric utility in California. This is purely a guess and it might well be the military or the port authority or another. Just IMHO.
NEW CLIENTS BY-PASSING PILOTS - GOING STRAIGHT TO REMEDIATION
The comment that most impressed us was:
A month ago a client would usually ask for a pilot study, but since the Fortune article there were no more requests for pilots. Clients wanted to go with a full contract at once.
TAVA has 400 employees (staff & engineers) as of May 1.
TAVA is currently billing at an average of $125 per hour and he thought that might go as much as $100 per hour higher.
I inquired if there were plans to increase their international presence and he replied that TAVA was rapidly developing partners in many parts of the world. Kind of sounded like McTava is on the way.
John is a remarkable man. He was relaxed and composed, obviously up on every phase of the business, He seemed slightly embarassed that he couldn't tell us more and would say, "Just listen to the conference call."
The presentation was a whirlwind, John reviewed an hour and half of material in the 40 minutes he was allotted. The presentation was slick and technically advanced. It featured multi-colored graphics with fades and dissolves. Every other presentation was like comparing a model T to a Corvette.
Bloomberg News Service taped Johns' presentation. It had apparently been arranged in advance because John seemed unsurprised by it. I do not know what will be done with the material by Bloomberg.
He spoke about the connection with Beck and CMED.
Karl Drobnik inquired if TAVA was doing anything with port authorities. John specifically mentioned port authorities as well as airports, utilities, medical facilities.
Current average income $50,000 per site inventory and assessment only.
There are 70,000 plants in the US, employing 100 or more, who could use TAVA's services. 6000 utilities, and 6000 hospitals.
==================================================================
Contributed by Bonzo3 - AOL Motley Fool
Robert & Priscilla (The Richmonds are a lovely couple) thanks for filling in the gaps and providing your perspective of Jenkins and his presentation. Rather than go through all the notes I took during Jenkins presentation, let me see If I can fill in a few more gaps. Some of this may be from my discussion with Jenkins at lunch but most is from the actual presentation:
Jenkins Presentation
I attended 6 presentations during the RedChip conference. Without a doubt Jenkins slide show (may have been a Power Point presentation from a Laptop) was the slickest graphically, as Robert Richmond has stated. Some slides of the Software GUI (PlantY2KOne) looked great.
It appeared to me that Jenkins seemed weary. As Robert had stated he had been traveling all week. Jenkins sort of discouraged the "break-out" session after his presentation (we already had ours at lunch) so he could catch an earlier flight and finally get home. This is one busy CEO.
TAVA is the ONLY supplier of a comprehensive "Tool-Based" solution supported by a full service offering (Control Systems Integration - CSI).
TAVA has initiated "Solution Provider Partners Program" - "Franchises" in Europe, PacRim, Latin America. TAVA provides Tools, Training and Support to TAVA approved companies.
TAVA's Y2K client count is now up to 90+ representing some 10,000 sites. [Increased to 100 since RedChip conference]
Average Inventory & Assessment = $50K/site. Remediation x 10 = $500K/site
400+ staff level and hiring aggressively
No problem yet in hiring technical personnel. More concerned in TAVA talent being recruited away by TAVA's customers
TAVA competes in following markets:
- $2.5B Plant Operations Solutions - 20-25% growth rate
- $1B Advanced Planning Solutions - 70% growth rate
- $10.5B ERP market
CD based Products:
- PlantY2KOne
- Utility Y2K One
- BioMed Y2kOne (Medical Devices)
- BevOne
- BakeOne
- LineOne
- FabOne
- FacilityY2KOne (Non-mfg. facility systems compliance; HVAC, Power dist., Security)
Strategic Alliances have been formed: Keane was mentioned (possibly CSC but Jenkins seemed a bit vague here or perhaps it was my notes. [Data Dimensions also - from TAVA|R.W. Beck site]
MISCELLANEOUS
- 70% of the 100+ Y2K clients are new
- TAVA has gained a "new audience" from old clients
- Acquisition opportunities (abound)
- Strategic Alliances (continue)
- "Significant acceleration of core business strategy"
- TAVA's billing rates will continue to rise
- TAVA Database over 15K components (mentioned this already but sounds great)
- 10K facilities in the Soft Drink supply chain
- 6K unique components exist with Food Processing company
- Tendency to "Pilot" appears to be gone (full scale projects only)
- Utility Industry just starting to address issue. Nuclear Plant shutdown cycle
- Hospitals way behind. BioMedical devices just starting to be assessed.
- 6K Utilitiy sites (Utility Industry is an $18B market)
- 6K Hospitals and 10K Nursing facilities.
- 350K Embedded devices with Automaker (does not include custom code)
- AIAG now addressing Automotive supply chain
One of the questions I asked Jenkins during the Q&A (I asked several) had to do with TAVA's connection to AIAG. He stated that the AIAG provided courses (training) for TAVA personnel so they were qualified to work in the automotive field. This training is also being provided to the automotive supply chain.
MY COMMENTS:
Do not concern yourself with the apparent lack of CD sales by the Wonderware Distribution. He seemed quite pleased with the CD sales by his direct sales staff "better than projected".
I think the "Solution Provider Partners Program" which is being rolled out WorldWide will be very successful in generating additional licensing revenues and recurring income.
I also believe that the TAVA/Beck alliance is going quite well.
Its not often when an individual shareholder can sit "eyeball to eyeball" with the CEO and discuss the progress of the company, its future and shareholder concerns.
=================================================================
PRINT THIS OUT AND FAX TO YOUR BROKER & FRIENDS IN, OR CONSIDERING, TAVA
Cheryl |
