<< It may be a quarter or two before some significant profitablity is evident. Any comments as to whether Ross Tech can acheive superstar class. They were once very highly touted by analysts like Chatfield Dean.>>
Barry,
I agree with you and John Snell that it was a positive call from the perspective of an individual investor looking for some understanding of 1) what went wrong, and 2) how things might get fixed.
The big question, of course, is when ROSS will return to profitability. I mean, this is what Fred May outlined as his fundamental focus. And while he said himself that he had only been on the job a few short days, he told the conference that it is unlikely ROSS will bring in more than $19 million or so during the current quarter.
Okay, so what went wrong? Well, maybe you guys can help out here, but I think it's pretty clear that ROSS's sales and marketing organization is a disaster. The organization simply broke down when ROSS undertook the difficult transition from being a business that sold primarily to OEM customers to that of a manufacturer and seller of system products. ROSS had all this great product and no one with sufficient skill in the marketing organization to exploit their technological advantage. No wonder reports have leaked out about low morale among the engineeering corps (indeed, apparently a story in a local Austin newspaper reported that Roger Ross resigned in the wake of a revolt among his engineering staff). While this might be an exaggeration, I think it's easy to understand the frustration felt by someone who has designed a better mousetrap only to find himself/herself working at a company that is unable to market it properly.
In addition to finding a new CEO and CFO, May listed as one of his top priorities the recruitment of a new Vice President of Sales and Marketing. I think we should pay very close attention to who they bring onboard and when they do it.
Fred May said we should be looking to the 1st and 2nd quarters of the next fiscal year (we're now in Q4) for signs of a turnaround. The good news for this quarter is that 1) May reported he has seen a sufficient number of new CEO and CFO candidates to take the process to the next stage; 2) the Viper development team is still intact and is on schedule; 3) ROSS has sufficient liquidity to continue as a going concern; and 4) ROSS is close to inking a development deal with Fujitsu that should reduce their extraordinary R&D expense and improve cash flow.
All well and good. But again, until they have the right people in place in the sales organization, I don't think we can expect a great improvement with our investment.
- Peter B |
