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To: Labrador who wrote (17192)	2/4/2000 6:41:00 PM
From: Manx	Respond to of 54805

Labrador--- RE: XTND...bringing Bluetooth products to market, and that it was named a finalist for "Best of Comdex." ----XTND has only 6 million float (9 mill. outstanding)....& 4 million cash... FROM you Know what: The Daily Double - A review of a company whose stock price has doubled within the last year. Feb 03, 2000 Extended Systems Inc. Ticker: (Nasdaq:XTND - news) Phone: 208-322-7575 Web site: www.extendedsystems.com Price (2/2/2000): $49 3/8 By Paul Larson How Did It Double? There have been two recurring themes lately here in the Daily Double. One is that we have seen and spotlighted an unusually large number of stocks that have quadrupled (or more) in less than three months. The second is that we have highlighted several different companies supplying the wireless boom. Today's company, Extended Systems, plays off both of these themes. Extended Systems makes software and other products that allow companies to create and easily use wireless and remote networks. It is an understatement to say that the entire wireless industry has been hot on Wall Street in recent months. Extended Systems has been one beneficiary of this increased investor interest, as the stock has gone from flat-lining near $5 per share through most of 1999 to a recent high just shy of $70 per share. There really hasn't been much news to account for the skyrocketing share price, just continued growth of the company's core wireless and remote computing business. Extended Systems did report on January 18 that sales were up modestly and the company's losses narrowed. It was also revealed that Extended Systems' mobile information management (MIM) products were growing at a dramatic rate (160% year-over-year in the most recent quarter), and MIM is obviously becoming a more important part of Extended Systems. Just as the company's products encourage folks to physically untie their computers from networks, Extended Systems has seen its stock price become un tethered from the ground. Business Description As the name implies, Extended Systems is a leading provider of hardware and software wireless and remote networking products. The company has two primary operating segments -- Mobile Information Management (MIM) and Printing Solutions. The MIM portion of the company makes products that enable mobile computer users to access, synchronize, collect, and retrieve information on demand, wherever they may be physically. The specific products here include wireless connectivity products, data synchronization software, virtual private network (VPN) remote access servers, and database management systems enabled for remote access. The printing portion of Extended's operations, which is largely a mature business, provides printer connectivity products that allow multiple users to wirelessly connect to networks and printers. Extended Systems is based in Boise, Idaho, and has more than 350 employees worldwide. The company was founded in 1984 and came public in March of 1998 at $8 per share. Financial Facts Income Statement 12-month sales: $57.5 million 12-month income: ($3.6) million 12-month EPS: ($0.37) Profit Margin: N/A Market Cap: $460.2 million Balance Sheet Cash: $3.7 million Current Assets: $22.5 million Current Liabilities: $10.2 million Long-term Debt: none Ratios Price-to-earnings: N/A Price-to-sales: 8 How Could You Have Found This Double? One way to have perhaps found Extended Systems was to look at the shifting focus of the company towards MIM and database products. These products are largely software-based and consequently carry higher profit margins than some of the hardware solutions the company had previously sold. While the historical sequential margin picture is somewhat clouded thanks to Extended's numerous acquisitions in the past twelve months, the overall margin trend is up. More importantly, the foundation has been laid for potentially significant top- and bottom-line growth. Another way to have possibly been alerted to the Extended Systems story was to read the many message boards on the Internet, including the highly civilized ones at Fool.com. There are numerous excellent investment ideas to be found surfing the boards, as long as one has grains of salt readily available to take some of the omnipresent hype for what it is worth. There are some truly golden analytical nuggets to be found out there, yet it is always a prudent and important idea to verify all facts and do the "final mile" of research for yourself. Where to From Here? It would not be surprising to see Extended Systems cash in on its recent good fortune on Wall Street. While the company does not carry any meaningful debt, the cash cupboard is looking a little bare at this time. Extended could very well issue more shares in a secondary offering to strengthen its balance sheet. Furthermore, any acquisitions Extended makes in the near future will, in all likelihood, be paid for with the company's stock. Over the next couple of quarters, the profit picture at Extended Systems looks much brighter than what was reported in 1999. Again, the company is now focused on software products, which carry higher profit margins per product shipped. In addition, growing and scaling a software product line is much easier than manufacturing physical products. Of greater importance is Extended's improved positioning as a one-stop shop for small- and medium-sized companies looking to expand the availability of their networks and proprietary data beyond the confines of their offices. This is an attractive alternative for employees who need to work remotely and greatly increases the utility of any given company's network and information. Remote access, both wired and wireless, is a vibrantly growing market that doesn't look to cease its growth for the foreseeable future. Profits appear to be around the corner for Extended Systems if the company can keep its current financial trends in place, namely growing sales while improving margins. In fact, the lone analyst publishing profit estimates for the company calls for Extended to get back in the black in the second calendar quarter, which seems to be a reasonable expectation. While predicting short-term movements in the stock price is nearly impossible, it is fairly safe to say that Extended Systems has raised the floor for itself over the past couple months. It is highly unlikely the stock will see the single digits again any time soon, especially if sustained future profitability is indeed in the cards. Related Links: Extended Systems Company Snapshot Extended Systems Message Board