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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: D.Teague who wrote (6179)	11/17/1997 10:16:00 PM
From: Jack Zahran	Read Replies (1) \| Respond to of 31646

I haven't read the Readchip review in detail, but I don't see it as a negative on TPRO. TPRO is a fast growing company (Super-fast) and to grow will be expensive. But, I don't agree that they will continue to have losing quarters. I run a consulting company and I bring on new hires with new contracts. You have an experienced employee lead the new hires and there is even a degree of on the job training. Although you don't charge the client as much for some of your hires as others, the contract is covering their expenses. TPRO evidently has a backlog of base contract work as well as tremendous amount of work coming down the pipeline. As they hire new engineers they will quickly go into the pipeline and start increasing TPRO's Services billings. In addition they have Y2K pullback into the second Quarter (That's now!) As they add Engineers they will go into the pipeline and increase their services revenue which has an average 52% margin. Notice that John mentioned that TPRO expects the 2nd Quarter pullback due to a few short-term Y2K contracts. TPRO uses the contract completion accounting method. That means that the revenue doesn't show up on the books until the contract is completed. So they will have the cash flow from contract billings even though the books may not reflect that yet. The second quarter, however, has Y2K contracts completed within it and this will reflect positively on the books.