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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (67038)	10/20/1999 8:53:00 AM
From: Lane Hall-Witt	Respond to of 120523

SPYG earnings out -- link and brief assessment. biz.yahoo.com Quick points: (1) SPYG met consensus estimate and whisper number with EPS at $0.02. Projected FY2000 EPS is $0.27. earningswhispers.com biz.yahoo.com (2) SPYG showed strong revenue growth throughout FY1999 as it completed its transition into the information-appliance business. After two years of shutting down its PC browser business and moving into the non-PC market, SPYG again looks like the growth company that it in fact is. 1Q1999: $4.523M 2Q1999: $6.299M (39.3% quarter-over-quarter growth) 3Q1999: $7.232M (14.8%) 4Q1999: $9.187M (27.0%) FY1998: $21.169M FY1999: $29.610M (40.0% year-over-year growth) (3) Software licensing contributed a surprisingly high 53.8 percent of total revenues. This is an extremely high-margin business: $4.943M in licensing revenues, with just a $0.050M cost of revenue (99% gross margin). (4) The balance sheet is strong, and will get considerably stronger once the SurfWatch sale is complete. That sale is expected to add $27M pre-tax in cash and investment assets. The deal also adds an essentially cost-free $2M to SPYG's financial results, going forward, because JSB will pay an ongoing fee to license SPYG's patented filtering technology. biz.yahoo.com (5) One area of potential concern is accounts receivable, which grew from $4.704M in 1998 to $8.731M in 1999. The forthcoming conference call and 10K may help explain this. All in all, this looks like a very solid quarter. It reinforces my belief that SPYG is quite undervalued: this company is already profitable despite the fact that its market space (information appliances) is just beginning to emerge. SPYG seems well positioned to benefit from the explosive growth we'll see in this space going forward. SPYG FY99 Revenues: $29.610M FY99 Income: ($ 1.897M) FY2000 EPS: $0.24 estimated Market Cap: $170.0 million Yahoo! Profile: biz.yahoo.com PHCM FY99 Revenues: $13.4M FY99 Income: ($20.8M) FY2000 EPS: ($0.95) estimated Market Cap: $6.619 billion Yahoo! Profile: biz.yahoo.com LBRT 1Q2000 Revenues: $5.3M 1Q2000 Income: ($12.5M) FY2000 EPS: ($1.25) estimated Market Cap: $1.974 billion Yahoo! Profile: biz.yahoo.com