Hey Cap'n. I'm happy to say that, based on discussions with a number of Tava-ites at the National Manufacturing Week show, ranging from staffers to executive management, I see very little probability of a slowdown, and if sales activity is any indication, quite the opposite. I would not be at all surprised to see a blowout quarter (or two). Customers are literally handing orders to TAVA, and not just for Y2K work. The transition to higher-margin manufacturing information systems work is already happening. TAVA Consulting is ramping up nicely, and the reputation in the manufacturing sector is *NOT* as a Y2K company, but as the premier systems integrator in the space.
TAVA is positioning itself as the CSC/EDS of its sector. Also, based on discussions with manufacturing control and information systems vendors, these suppliers are going out of their way to make sure TAVA is "on their side". Competitors with similar capabilities are almost non-existent, and small-to-mid-size systems integrators are tripping over themselves to get absorbed into the TAVA family. Good sh*t is happening "in the real world".
Additionally, I've done some thinking on the value of their database and relationships built from Y2K work, and I've actually assigned a monetary value to it, moving forward. The basis for this "value" is in reduced cost of sales of approximately 3-5% of revenues (basically straight to the bottom line) on core business/followup work in their accounts. This works out to about $0.25 in operating margin *PER SHARE* moving forward. Serious stuff. Serious advantage.
Any investor counting on the "flash in the pan" effect will be severely disappointed, IMNSHO. I've been critical of TAVA in the past for its positioning, but I have almost no doubt that the message has been received.
Now the challenge remains to communicate it to the investment community. |
