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Technology Stocks : TSI TelSys Corporation - Satellite communications
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To: Robert who wrote (121)5/6/1999 10:00:00 PM
From: Ron Struthers  Read Replies (1) of 241
 
Hello Robert, here is some comments I sent out in an update

I was surprised on how the news came out . This is not the
kind of news you halt the stock for. It might have easily been released
with some other more positive sounding news. In any case the market
just yawned as usual and a whole 8,000 shares traded, knocking it down
$0.15. Simply put, the market does not care and is not at all aware of
this stock yet. I don't think the news is any big deal and had to read
it a few times, wondering why it was released on its own. I don't
believe the market place had any focus or concern about Japanese sales
but was more apprehensive on future NASA and US Defense Dept. orders.
I suppose to reduce staff 20% you need a reason to do so and this was
it.

To TSI, Japan is NEC, that has been one of their large customers in
the past. Japan is in economic difficulty and NEC in particular has
been hit hard, along with political scandals and the Japanese Space
Agency. Therefore, TSI expects orders will be down from NEC. I don't
know why it was felt necessary to make news that basically is about
one particular customer that will have less orders. I question whether
this news is material to the market, but I suppose unfortunately, it
is quite material to the 20% of employees who lost their jobs.

I will give the company credit for being forth coming with this
news and I do believe from when I originally reviewed their
financial statements that the company is well run and a tight
rein on expenses and costs is maintained. This is another example
of TSIs prudence in this area.

As far as what the effect to TSI sales and revenues this will cause? I
expect it will mean a temporary slow down or a leveling off of sales
growth, but not a decline in revenue and sales. TSI has brought in new
customers like the US Defense Department and profit margins are
improving.

Year end and 1st qtr. results should be out soon and this will help paint a
clearer picture of TSIs direction.

I am quite keen that their LavaLogic division can provide
some very positive devlopments this year.

Ron
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