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Gold/Mining/Energy : Trojan Technologies Inc. - T.TUV -- Ignore unavailable to you. Want to Upgrade?

To: Bid daddy who wrote (51)	1/31/2000 9:34:00 AM
From: Dan Hamilton	Read Replies (1) \| Respond to of 127

I attended a presentation recently by the President and new CFO of TUV. They blame their recent troubles on the difficulties in making the transition from a $20 million company to a $100 million one. Adequate controls and systems were not in place. They recognize revenues as equipment is built for customers. If an order was 50% built in August, then they recognize 50% of the total value of the order. This past year they got ahead of themselves and were building orders months before they were to be shipped to customers. They have changed that practice, so FY2000 gross sales will not grow versus 1999 (around $90 million). FY2000 will likely be breakeven. They expect sales to grow 30% for FY2001. They would not predict earnings for 2001. Currently 85% of their business is in wastewater treatment. They have between 70 - 75% of the U.V. market. The main competitor is a German company with about 20% market share. U.V. competes mainly against chlorine, as well as ozone. Their technology is complementary with Zenon's RO technology, not competitive. There are 62,000 wasterwater treatment facilities worldwide and 3,000 have had U.V. installed. Of those Trojan has installed 2,200. Average order size continues to climb and is now around $1 million. They are bidding on some as large as $50 million in the Middle East. They currently have about 8,000 jobs where quotes have been submitted, representing $1 billion in business. However, quotes are a prior stage to a formal bid on an RFP. The sales cycle is about 3 - 5 years between quoting and being awarded the job. They have pilots underway in drinking water treatment, and will report results at a conference in New Orleans in two months. They also have a next generation of U.V. equipment in development - it should be ready by the end of 2000. They expect it to be "significantly lower in cost (purchase and operating) than anything on the market. It will be protected by patents.