Y2K (Year 2000) Stocks: An Investment Discussion Message Board

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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion

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To: Nanda who wrote (11785)	5/30/1998 10:17:00 PM
From: paul e thomas	Read Replies (2) of 13949

IMRS ANNUAL MEETING I had the great fortune to attend the IMRS annual meeting where I was one of 3-4 shareholders. The entire Management team of IMRS was present including the Presidents of the new French Company they have aquired and the head of their English Subsidiary. Since there were so few shareholders I had the opportunity to speak privately with Satish and John Hyman the new COO as well as the foreign heads.The tone of the meeting was extremely upbeat with no B.S.I made a point early on of saying that despite the advice to the contrary from fellow SI posters that I had nearly all my eggs in the IMRS basket. I believe this helped me get information from Satish I am not sure he would broadcast .Here are the key points I took the time to write down: The IT market segments that IMRS is driving to penetrate are Software new development, and Legacy System transformation. These multi-billion $ segments are expected to grow by a factor of 4 between 1997 and the new Millenium. They are being driven by the CIO of the Fortune 500 size companies around the world who see the compelling need to modernize their old legacy systems in order to really be able to compete effectively in the modern Information driven age we are in. The industries IMRS is focusing on BANKING,INSURANCE,UTILITIES,RETAIL & WHOLESALE,MANUFACTURING, AND HEALTH CARE.To illustrate the changes within these industries . Satish talked about Utilities and cited the significance of competition now emerging within geographic markets. These industries have been chosen because they all have complex large 10-20 year old legacy systems. They also are not ones where packaged software from somebody like Oracle or PeopleSoft can be dropped in. The French aquisition appears to be a great strategic coup as this company has developed object oriented software which greatly facilitates the creation of complex programs and enhances the productivity of the programmers creating the custom software needed for each industry. Satish said they are in the process of adding people who are industry experts in each of the 6 industries they are targeting. To illustrate how this business can grow at a given account Satish cited their history with Michelin. They started a pilot project of 1.8MMS. This was followed by a 5mm$ project. They now have 300 people working on Michelin work on a 26MM$ multiyear project.IMRS has a client list now of more than 70 Fortune 500 Size clients and believe they can do 10MM$ business with 85% of these existing customers. IMRS has consumated the French Aquisition. They are buying a company with about 15MM$ sales ,which has 5MM$ in cash. They will pay only about 28MM$. This a price to sales ratio under 2 which is a lot less than a number of their US competitors have paid for their aquistions.I pointed out in the meeting my calulations indicate IMRS will have 150MM$ in cash by the end of 1999, excluding the cash spent on this aquisition. TO show the significance of this cash picture if IMRS were to replicate the French aquisition and use 50% equity financing IMRS could increase the current annual revenues to 2.5X the present level.I was told another overseas aquisition will be shortly announced. I know some details the key thing is they have just landed a 26mm$ cotract in that country to add to the business base they will be aquiring Satish talked about the depressed stock price. They have just met with the mutual funds who expressed the belief the price has been driven down by momentum players who sold because there is risk every time any company transitions from one market or product line to another. Satish acknowled that market perceptions sometimes drive reality. They have just hired two new PR firms that specialize in communicating to the investment community. This alone is great news. From an overall point of view I came away with a stronger than ever belief that IMRS is a really oustanding long term investment.I told the people there that the competitive strengths and strategies outlined in one of his charts he presented at the recent ALEX BROWN investor conference were the very reasons why I was willing to accept the risk of a non diversified portfolio.In my work as a business and Senior Management consultant for over 10 years at one of the Fortune 15 companies I have dealt with many very talented people. Satish Sanan has extraordinary vision and knows how to motivate people. Every employee with the company over a year gets Stock options. Every Supervisory level person and above with 6 months experience gets options.The employee turnover is less than 10%. By every financial measure I have examined IMRS has the best performance among it's competitive peers.

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