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Non-Tech : GUMM - Gumm Tech International Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Allan F who wrote (50)	11/21/1997 7:14:00 PM
From: Mike M	Respond to of 148

Allan- I am quite certain Gum tech would prefer that the customers be announced...and in fact they are on the Form 8...Any reluctance would have to be on the part of the client who may wish to maintain some surprise advantage on their competitors...Sorry, I have no better explanation. My guess for the initial order is to get product out to the sales force, test packaging etc...This is a new product for this company and will take time for them to build up sales, initial order is probably mostly for demonstration purposes...again, just a guess... Also please remember that GUMM is gearing up for Nabisco etc...their capacity is being expanded but is currently limited... As Anax so articulately pointed out in the last posting, we are just exchanging ideas...here is another one...Perhaps GUMM would like to enjoy their unique circumstance as only FDA approved state of the art facility a little longer and keep their success story as closely held as long as they can...before the "me toos" gear up....It takes a while to build infrastructure and seek approval, their lead is significant! So these postings are easier to read I will attempt to answer other questions on additional postings. Mike

To: Allan F who wrote (50)	11/21/1997 7:26:00 PM
From: Mike M	Read Replies (1) \| Respond to of 148

Allan- Actually their market cap is just under $55M...(5M shares at 10 3/4). Production capacity is a tough one. I understand they can make as much gum as anyone could want...Packaging and coating are the bottlenecks...The 460k warrants at $7 were called to address plant expansion...which is happening... Trying to value a stock at the cost of plant isn't very scientific nor does it appear to stand up in the market place...More important is the potential sales/earnings... Zolt was a good example why your valuation method didn't work! Mike

To: Allan F who wrote (50)	11/21/1997 10:32:00 PM
From: Mike M	Respond to of 148

Allan- Whoa there Nellie! Revenue capacity...for somebody who, as Anax likes to say, is only making specialty gum...But that, of course, is the beauty! How fast can you design the package, coat the gum and package it...How complicated is the machinery? "Capacity" has little meaning here. The real question is, how many customers can you find? The answer is, a lot! For margins I will defer to Mr Kern's comments on the telephone conference...after fixed costs, each $8M sales reaps about $1.5M profit...using his math, $25M would bring close to $5M net or a buck a share. If this were the only sales it might justify a PE of 15...But this is still small potatoes compared to Nabisco,( IMHO). Mike