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Non-Tech : Applied Gaming Solutions - AGC (ASE) -- Ignore unavailable to you. Want to Upgrade?

To: Grant Movold who wrote (441)	8/12/1999 6:38:00 PM
From: J. Plantinga	Read Replies (1) \| Respond to of 509

Update... Just spoke with IR (Rob) at AGC. Here are the main points of our conversation: The launch went very well and the system has performed flawlessly. The first 6/36 draw still has to be run. The 6/36 draws will be televised. He wasn't sure about the daily draws. Over the next week they'll be running a "Lottery Fair" to continue to generate interest and educate the market. Rob didn't have any kind of sales numbers yet, but thought he might have sometime next week. David Aftergood is currently in HCMC working out details of the contract there. Rob couldn't tell me exactly what details were still under discussion, except to say that AGC's percentage of the take might still a point of negotiation. We don't know exactly when the Contract will be a done deal, but AGC's target is still to have HCMC up and running by year-end. Implementation in HCMC will go considerably faster than in Hanoi because the "back-end" infrastructure (central computer, etc.) is already in place, most of the technical kinks have already been encountered and worked out, and because the HCMC power grid is much more stable. Costs for implementation in HCMC may be covered in part by equity financing, but they will try to avoid that as much as possible to minimize dilution. Estimates are that Hanoi and HCMC combined account for approximately 80% of the lottery market in Vietnam. I asked about profit margins, and Rob didn't have any numbers but agreed that they should be quite high as most of the costs for this venture are up-front. On-going costs include (currently) 9 people supporting the System, and AGC's normal operating costs. So as revenues increase, costs won't increase proportionally, thus margins will improve. As for the share price, Rob was as surprised and disappointed at the market reaction as the rest of us are, and didn't have any real explanation other than the obvious (i.e., generally poor market conditions, couple of heavy sellers shaking investor confidence, etc.). Well, that's about it for my chat with Rob. I'm personally very pleased with where things are for AGC, the share price notwithstanding. They've "made good" on pretty much all of their plans going back more than a year, in spite of numerous economic, technical and political obstacles. (How many ventures die before getting this far--even in much better business climates?) I believe this speaks volumes about the competence and determination of the management and staff at AGC. I believe we're in good hands and I'm very long on this stock and looking forward to the next 6 months, 1 year, 5 years, etc.. Cheers! JPlantinga