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Technology Stocks : NTN Communications, worth 185 million?
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To: JAMES F. CLASPILL III who wrote (291)11/15/1996 6:08:00 PM
From: Patrick Keeler   of 2985
 
Thanks for the replay number James.

Here are some specific points I wrote down [my comments in brackets]:

* Sokol is running the day to day operation.
* Hospitality games played up to 57 million from 25 million year over year.
* 2 million games played online in last quarter vs. 680 thousand in 1st qtr.
* 205,000 hours on AOL in October 96 vs. 88,000 hours in Oct. 95.
* 14-20% cost of capital is "too big but very manageable."
* Cash Flow would increase 61% if NTN could just refinance the equipment leases. Sokol labeled this as "the key factor" going forward. [He repeatedly said how horrible these arrangements are for NTN and how easily they can be refinanced through internal cash flow]
* NTN recognizes that if they have an electronic link already established with all these businesses they can leverage that link to offer all kinds of other services, such as EDS.
* Sokol sees no competition and none on the horizon. He characterized NTN as a monopoly in a potentially huge market.
* FCC fiasco did not effect operations but has delayed 220 new hospitality sales. [I assume these sales did not include lease buy backs ;) ]
* Hiring freeze in place since 10/1/96 and money set aside for severance pay.
* Sokol wrote off most accrued problems to start fresh. [Forward results will be Sokol results not Sokol with Downs problems results]. Write offs do not effect cash flow.
* Close to finalizing NFL license.
* Stock options tied to cost reduction effort. Company bought back 781,000 share lately. Sokol thinks stock is a great value and said the company might buy back more.
* Direct Margin [same as Gross?] is up to 71% from 66%.
* Hospitality sites increased 7.9% during the 3rd quarter. [That is an annualized 36%].
* Home business growing very rapidly.
* Still $3.6 million due from 3DO.
* Java enabled product for internet in beta testing.



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