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Technology Stocks : WavePhore (WAVO)- VBI fed WaveTop for WebTV -- Ignore unavailable to you. Want to Upgrade?

To: BGL who wrote (777)	11/20/1997 4:35:00 PM
From: BGL	Read Replies (1) \| Respond to of 2843

Is WAVO at COMDEX? Any news, partnerships, license agreements? Would have thought this is an excellent chance form press release happy WAVO. BGL

To: BGL who wrote (777)	11/20/1997 9:21:00 PM
From: stephen p barnes	Read Replies (2) \| Respond to of 2843

Yo! BGL, <<Why was it concluded that WAVO will only become profitable in a year or two? I understand that the Newscast and Network divisions are both profitable? And WaveTop R & D costs have already been paid for. Won't the profitability of WAVO turn around once WaveTop is released... shortly (I hope... any news?)?>> The only Street analyst publishing numbers on WAVO (to my knowledge) is Joel Kramer of First Albany. His numbers have WAVO losing $0.60 in 1998, getting into the black sometime in late '99, and 2000 as WAVO's first calender year of profitability with $0.35 in EPS. (I believe) I should point out that Kramer expects WAVO to be "cash flow positive" sometime next year. (The difference between "earnings" and "cash flow" is largely a function of the depreciation & amortization and other non-cash charges to which WAVO is subject.) My firm's financial model for WAVO has not yet been released to the public, but has been revised (profitability pushed "to the right") since we last published numbers, which called for WAVO to get into the black as early as next year. What has happened is that we now fully appreciate the new business model under which WAVO is operating, one which includes the advertising revenue of WaveTop. This model is more attractive in the long term for the company than is the previous model we thought we understood, one which focused on Newscast and WavePhore Networks. This new model features high recurring revenues and terrific operating leverage. The big money here is made on each incremental sale. Finally, the release of WaveTop will not instanty transform WAVO into a profitable venture. There are continuing investments required to handle the level of business WAVO expects but, once those are made, the required continuing investments should be minimal. (and the incremental profits therefore fat.) In other words, some additional expenses beyond what we anticipated here at the front end in exchange for a much larger and more profitable revenue stream, basically into eternity. Hope this helps and thanks for asking. regards, stephen barnes