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Technology Stocks : FirstWave Technologies (FSTW) -- Ignore unavailable to you. Want to Upgrade?

To: Mike M who wrote (7850)	2/4/2003 7:04:41 PM
From: TEDennis	Read Replies (1) \| Respond to of 9677

re: There certainly was plenty of revenue to make .40 cents Uh ... yeah. I guess. But only if expenses were much lower than they were. Are you trying to justify your analysis being off by about 50% ? You DID do some analysis before you came up with your estimate, right? I can't wait to hear Buddy's reaction. What was the big hole in his analysis that made him estimate so high? re: expenses - They had to add personnel (read: overhead, expenses, whatever) to support the generation of that "plenty of revenue to make .40 cents". One hopes that the revenue will continue AT LEAST at Q4's rate, or it will be an ugly Q1. Speaking of which ... having worked in the software industry for a gazillion years, I know that Q4 is typically the barn burner quarter, and Q1 is the "eat-at-Taco-Bell-cuz-that's-all-we-can-afford" quarter. If those big contracts that keep being aluded to don't happen, all those added expenses (personnel) could be a killer. Regards, TED

To: Mike M who wrote (7850)	2/4/2003 7:37:25 PM
From: TEDennis	Read Replies (4) \| Respond to of 9677

I'm preoccupied on a project, so haven't had a chance to do anything other than skim the PR. Will listen to the CC replay this weekend when I have time to analyze what the heck it means. There's something in particular I need to contemplate, because it doesn't sound rational ... They hired 10 more folks to do the knowledge transfer of the new product to FSTW from Extreme Logic (or Extreme Networks if you're a broker with no clue as to what the company does or what firms it might form an alliance with). I wonder whether those people are intended to share time equally between R&D and Professional Services, or whether they're supposed to be primarily involved in one or the other activity. How could they use 10 more developers on a product that was supposed to be "launched" in November? Serious enhancement plans? But, why enhance it ... since they're saying that it's no longer a feature war? Professional Services revenue should actually DECREASE, the way I see it. This new product is supposed to take only ONE programmer per business analyst instead of the FIVE that the old product did. (Old? It was announced just last summer!) So, to INCREASE Professional Services revenues from the current level with only 1/5 the necessary staff per project, they'd have to MORE than QUINTUPLE the number of product licenses. Whoa, baby !!! Quintupled licenses means tons more license revenue. This sucker's going to the MOON !! Ain't logic grand? TED

To: Mike M who wrote (7850)	2/4/2003 8:43:29 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 9677

There certainly was plenty of revenue to make .40 cents. Yeah, if you assume away a half million plus of expenses, they did just great. LOL. Maybe they should report proforma numbers. Mike, you didn't really expect them to sustain the kind of margins they had in Q1 last year, did you? Or even Q2 and Q3? Nope. Sorry, but I told you they wouldn't. Funny how it works, but when almost all your revenue comes from one huge windfall project, your margins are fatter than when you have to go out and find a whole bunch of smaller customers. BTW, was there any comments about how many new customers they signed in Q4? I'd like to compare it to the five -oops- seven (I keep forgetting to count the ones not paying anything) from Q3. ;-)