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Strategies & Market Trends : YEEHAW CANDIDATES -- Ignore unavailable to you. Want to Upgrade?

To: ACAN who wrote (13977)	12/21/2005 1:33:45 PM
From: Ken W	Read Replies (1) \| Respond to of 23958

Alan I was on the phone with Mr. Carlson just when the release came out and we were discussing rev. recognition/placing numbers on these contracts. Basically, the reason that they do not put hard numbers on these contracts is that they recognize income from the contracts on a % cost base. The thing to watch is backlog rev's rather than straight up income for xyz project. What happens, to my febble understanding, is that a contract gets signed for a project for x number of dollars..the first payment is due on start (much like if you hire a contractor to do a remodel on your home) at different phases of the project certain payments are due prior to continuation of the work. If you were working with a contractor on a home improvement job, they would call these "draws"...so there is no real full sum paid at the beginning or end of a project..it gets paid out to ALAN a little at a time...Now, to me, that has two effects. 1. They don't show in a Q report all that they have coming in as it is coming in over time. Some people would not like that as there is not a clear "number" associated with any one contract(they don't break them out per contract in their reports) 2. What I do like about it is that there should be a constant money flow from multiple contracts as each one pays a % at different intervals. By looking at backlog we can estimate how much is due over the next months. So long as ALAN continues to get these contracts we will see continued money flow into the company. If they can start to land some of the larger contracts (LA County, Japan, Aus.) then that money flow will increase, but as far as saying "ALAN will get x amount of dollars to their bottom line next Q. from the cumliative contracts." is a misnomer. IMO....the obvious key is ongoing contracts and then follow up service rev's on those installs. In the very near future I'll be speaking with Mr. Oster at TSI itself. He will be able to better inform us on sales, marketing etc. than Mr. Carlson (which btw is very extremely confident there will be NO reverse split.) Ken