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Technology Stocks : Neoware Systems -- Ignore unavailable to you. Want to Upgrade?

To: tradeforliving who wrote (201)	8/28/2002 10:38:43 PM
From: D. K. G.	Read Replies (2) \| Respond to of 256

Neoware Tops Expectations Amid New Customer Growth BY PATRICK SEITZ INVESTOR'S BUSINESS DAILY investors.com Neoware Systems Inc. (NWRE) is showing the fruits of its growth strategy. The provider of thin-client computers Wednesday reported fiscal fourth-quarter sales of $14.1 million, up 165% from the year-ago period. Profit surged 278% to $1.7 million. Earnings soared 225% to 13 cents a share in the quarter, ended June 30. Analysts had expected 10 cents. Investors cheered the news, lifting the stock 12% to 18.72 on heavy volume. "We believe that this is just the beginning of our growth," said Michael Kantrowitz, Neoware's chief executive. "Clearly we're delivering excellent, healthy growth, and so is our market." The company, based in King of Prussia, Pa., is a bright spot in the information technology industry. Most major hardware and software players are seeing their share prices tumble as corporate demand for their products remains soft. But thin clients are expected to grow at a 30% compound annual rate for the next several years. And Neoware is outperforming the overall thin-client market. Thin clients are stripped-down devices linked to large server computers. The machines are seen as cheaper to buy and maintain than personal computers because they offload most work to the servers. That's a potent sales pitch in today's economy. Also, thin-client systems are seen as replacements for outmoded "green-screen" terminals. Thanks to mergers and alliances, Neoware is now the No. 2 supplier of thin clients worldwide. It's acquired thin-client businesses from IBM Corp. (IBM), Network Computing Devices Inc. and Boundless Corp. (BND) Neoware has about 30% of the market, second only to Taiwan's Wyse Technology Inc. Two years ago, Neoware had just 3% of the market. Growing From Within Neoware executives are most proud of the company's internal growth. Excluding the IBM and NCD deals, Neoware's sales increased nearly 20% sequentially and 80% from the year-ago quarter. Neoware's alliance with IBM, announced in January, is giving the company tremendous momentum, analysts say. The IBM alliance contributed $2 million in sales for the June quarter. Neoware executives expect IBM-related sales to rise significantly in future quarters. Thousands of salespeople at Big Blue are helping to sell Neoware systems. Via the IBM pact, Neoware is pursuing potential sales of $100 million, Kantrowitz says. IBM did about $40 million in thin-client business in 2001. Good Signs Neoware added 263 new customers last quarter vs. 169 the prior quarter. The company sees the growth as an important indicator of future revenue. Customers typically start out placing smaller orders and then boost the size of orders over time, Kantrowitz says. "We're landing more new customers who are accelerating their implementation of thin-client computing," he said. Many of the new customers were the result of the IBM deal, which has opened the door to larger thin-client projects. Historically, the largest Neoware projects have been about 5,000 to 7,000 units installed over two to three years. "With IBM, we have access to the largest opportunities in the business," Kantrowitz said. "IBM is clearly the best integration partner you could have in this space." Analysts don't see Neoware's results last quarter as an anomaly. "The momentum is here to stay for the foreseeable future," said Jeffrey Van Rhee, a securities analyst with Investec Inc. But the company is still small and revenue growth could be uneven, says William Becklean, an analyst with Commerce Capital Markets. "The concern is the potential for lumpy quarters," he said. A large order one quarter and not the next could make its sales inconsistent. Neoware executives guided analysts higher in their sales and earnings forecasts for fiscal 2003, which started July 1. But they didn't set targets because big contracts can be hard to predict. Neoware gets higher profit margins than its rivals because it focuses more on the software to run thin-client systems and on consulting, training and other services. Competitors are more focused on hardware, Kantrowitz says. The company now has an installed base of nearly 1 million thin-client devices in use. "Each one of these seats is an opportunity for high-margin software sales moving forward," Kantrowitz said.

To: tradeforliving who wrote (201)	6/13/2003 11:44:04 PM
From: MENSO	Read Replies (1) \| Respond to of 256

>>>> They need to increase the shares so some of the bigger boys can get in without running the stock to $30. <<<< Well, the "bigger boys" are now all in apparently based on how they've gobbled NWRE shares up in the last 12 months? What happens next?