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Technology Stocks : TAVA Research - No Discussion -- Ignore unavailable to you. Want to Upgrade?

To: C.K. Houston who wrote (267)	11/15/1997 2:23:00 PM
From: C.K. Houston	Read Replies (1) \| Respond to of 810

As general update to company's Y2K activity, John Jenkins, CEO offered the following: *''Our Y2K business opportunity is accelerating faster* than our initial expectations.'' Our total engagement count now exceeds 25 clients covering more than 60 sites. NEW CLIENTS INCLUDE:** Company background info provided by CK HOUSTON Cyprus Amax Minerals Fastest-growing & largest US-owned mining company. A leading worldwide producer of copper & coal, the world's largest producer of molybdenum & lithium. cyprusamaxminerals.com Kennecott Energy One of the five largest U.S. coal producers. "We stress quality in our mining operations, from computer analysis of our extensive core drilling samples, to sophisticated statistical programs that accurately determine coal quality in advance of our mining operation." kenergy.com Unilever Foods North America Assessment & Analysis to be completed THIS month!!) techstocks.com Too BIG to write about here, click link Ivax Pharmaceuticals Assessment & Analysis to be completed by January '98 One of the largest generic drug companies in the world, IVAX is a holding company with subsidiaries involved in generic and brand-name pharmaceuticals, personal care products, and specialty chemicals. It makes more than 100 generic prescription & over-the-counter drugs and distributes another 700. Subsidiary Baker Norton makes brand-name urological medications such as Polycitra-K, a nonsurgical alternative for the treatment of kidney stones. *Among others.....* While many clients are still in the pilot stage, developing cost models for their 1998 budgets others are accelerating dramatically their activity. Unilever Foods has asked us to complete the assessment and analysis phases on their U.S. and Canadian plants before the end of November. A similar engagement with Ivax covers a number of domestic and international operations with a completion target of January 1998. In the past three weeks, the company has received orders for more than $1,500,000 of PlantY2K One product and services, and expects to close up to another $2,000,000 in the next 30 to 45 days. These orders represent primarily initial inventory and assessment tasks, and include little remediation effort. SIDEBAR: Conference Call (Jenkins) ["Over the course of the last couple weeks, we have received in excess of $6 million worth of orders in our base business."] As a raw measure of our activity level, we are in various stages of negotiation with a large number of multi-plant organizations that cover approximately 3000 plant sites. These include both domestic and international operations. Developing alliance relationships with information technology service companies active in addressing Year 2000 compliance in business systems. This has already led to a number of joint proposals providing clients with full scope Year 2000 service.

To: C.K. Houston who wrote (267)	11/15/1997 3:39:00 PM
From: M. Frank Greiffenstein	Respond to of 810

Re-organized Q1/98 conference call notes according to more meaningful categories. Related bits of information were scattered through the conference call, so I pulled them together. MARKETING -- Cycle time between presentation and acceptance contracting rapidly, down to 2 weeks in some cases. -- Jenkins notes that sales force getting access to higher ups easily, people who make decisions about mutli-plant engagements. Unprecdented in TAVA history, Jenkins "extremely excited." -- IT-Year2000 firms are referring people to TAVA. These firms are unnamed. This has resulted in the Ivax Pharmaceutical contract already. --Word of mouth is unusually strong, -- Fluor-Daniels not as important as previously because of word of mouth strength -- Wonderare conti ues to be cirtical, will reieve an unstated portion of new 20K CD-ROM run due 11/20/97. Figure of 15-20K potential accounts to access reiterated. -- "Pseudofranchising model" used, meaning VARs, resellers and possibly subcontractors being trained in y2k technology. -- Ken Owens, formerly of Fluor-Daniels, will spearhead the (a) relations with IT-Y2k vendors (b) certificaiton of VARs and subcontractors. -- Four new customers mentioned in news release verified (including Unilever of North America). -- MSFT-like strategy of getting toolkits out to as many people as possible in order to brand-name product. -- AON important, TAVAs y2k product touted as improtant for business interruption insurance issues. Has already resulted in one y2k contract. -- Strong existing entrenchment in food/beverage and drug industries, TAVA also targeting oil rig and utility industries. -- Marketing goal is to engage 3,500 plants (plant can have more than one site). Jenkins things average revenues of 20K per plant reasonable. Large engagements will reduce per plant pricing becuase of bargaining power of larger clients, but gross revenues iwll of ocurse be higher. YEAR 2000 CONTRACTS AND POTENTIAL CONTRACTS -- 1.5 million sales in CD alone, 2 million more in sales likely in next three weeks. -- Y2k work for 50 of Unilever's North American plants, contract calls for completion by end of November, 50 sites. -- AON alliance has resulted in one y2k product customer, unnamed. -- One utility has signed up, unnamed. 600-700 K estimated price tag (but this note disagrees with others notes, so needs clarificaiton) -- "In dialogue" with GM regarding their 300K worldwide robots with embedded chips. not a customer "yet". -- Y2k related revenues bmay be recognized earlier than thought, in Q2 rather than in Q3 as first recognized. -- All told, 3,500 sites in sales/,arketing channels, estimated at 20K per site. CORE BUSINESS CONTRACTS -- Just sealed 6 million dollar deal with corporation in Chicago, corporation unnamed. Y2K PRICING -- 4K for CD -- 5K for access to database -- $200 per report per unique embedded device. -- Not clear whether this is ala cart. COMPETITION -- One large engineering services firm doing similar work without a branded toolset or database. Company unnamed. -- Four-Daniels indifferent to y2k work, causing Ken Owens to bolt for TAVA. FINANCES and REVENUES ---Cash very "tight", one million in cash and four million in "working capital." --Marshall Hyman owes TAVA 3.9 million bucks, MH will "review" audited bill and defer aciton until end of November. -- Revenue breakdown of 60% consulting fees and 40% from mark-ups of materials/equipment. Only 100K contributed byt y2k work in Q1. Margins for mateial resales are about 10%, so logically 10% markup. -- Hourly consulting rate more than doubled from 75 to 160 bucks. Price increases not passed on to engineers yet. Implication of improved margins from consulting work. -- Performance bonds not neccesary, saves $$. -- EBITDA was slightly positive, amortization chief reason for bigger than expected loss. COMPANY GROWTH -- Added only 12 engineers since 7/97 -- Goal is cap of 400 engineers, Currently about 280 (up from 250 preivously). -- Y2k and coe work above what 400+ staff can handle will be outsourced to sub-contractors and resellers. -- Will continue to offer non-y2k related software live beverage industry systems control stuff, but sales not mentioned. -- Jenkins wants this tight control management strategy in order to ensure enduring business relations with larger Fortune 500 companies past 2000. DocStone