The company issued an informative press release today in connection with the earnings announcement. IMHO, the two most imprtant parts were the following:
"During 1998, CBT grew its backlog, which is firmly contracted business that has not yet been recognized as revenue, to approximately $144 million, representing a 31 percent increase over the $110 million in backlog at the end of 1997." This suggests to me increasing amounts of deferred contract revenue, which, of course, is more appealing than declining amounts of deferred contract revenue.
"We had a challenging third quarter in which we did not meet management's internal revenue expectations, and after which we made a number of far-reaching changes in the business and executive management. During this time of dislocation, we were able in the fourth quarter to meet internal goals for the quarter by increasing revenues 20% sequentially and by keeping costs under control to enable us to deliver .05 in earnings per share." The important word here is dislocation. It is an arduous task to manage a business after its stock has tanked and analysts and employees as well have seen all stock appreciation vaporize and their dreams along with it. But with a new change of leadership and attention to cost controls, IMO the market is now starting to recognize that the changes that are now occurring with the company are clearly for the better.
With the right people at the top and a broad customer base, all you need is a little more time for the market to be convinced. |
