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Technology Stocks : Spectran (SPTR)...Speaking of White Hot Lately -- Ignore unavailable to you. Want to Upgrade?

To: David K. who wrote (986)	11/23/1997 9:26:00 PM
From: Rowan da Silva	Read Replies (1) \| Respond to of 1147

David K: I am going respond to Yore, but will defer to his desire to be left alone as this is only fair. >>Our disagreements were with your assumption >>that press releases and other published >>information and verbal comments were treated >>as fact. If one does not treat information published in 10q's, 10k's, sec prospectus, press/earnings releases with a reasonable degree of confidence then what alternatives are available to investors ? Play golf with the CEO ? Buddies that work at the company ? I thought that the whole point of the SEC and compliance & regulations that a publicy traded company has to follow was to provide investors with info for their decision making process. True it is not perfect, and there are instances when the boys end up in Cozumel with your money and folks like us are left holding the bag, but this is not the norm in my experience. Besides, SPTR is a publicly traded sompany since 1981 or 1983 (check this please). >>Also see if you can get SPTR to comment on >>their Asian and S A sales. This raises an auxillary issue. In general SPTR is not really communicative. They may have the attitude that "We manage the company and not the stock and if the company is managed right then the stock price takes care of itself". On the face of it, I can't argue. I don't see how I can get SPTR to comment on their Asian and SE Asian sales. The auxilliary issue is that I have been following their backlog pretty closely as they work with long term contracts and so the backlog is a good indicator of the future. (Source 10k's and secondary prospectus). 3/11/94 Backlog 10.1 million 3/17/95 10.1 mill 1/31/96 17.4 mill 12/31/96 54 mill 1/31/97 69.4 mill Approx 30.9 mill of 1/31/97 backlog is to be delivered in 1997 (96 10K). This leaves them with a backlog of approx 39 mill going into 1998. Observe the dramatic increase in backlog that coincides with fiber shortage, i.e., start of 1996 to 1/31/97. Assuming they have not signed anything else since 1/31/97, they maybe going into 1998 with a much lower backlog than they went into 1997, i.e., 70 mill as against 39 mill. Given the fact that the supply exceeding situation came to light in the 2Q/3Q 1997 timeframe, it would not be unreasonable to say that it is quite likely that they have not signed up a whole lot of new contracts in the 2H of 1997. Then again I may be wrong on this one. To be fair, SPTR's standard practice has been to disclose the backlog ONLY in the 10K and not on a quarterly basis. The only exception being the secondary prospectus. All through the 2Q & 3Q 1997 I have called SPTR's investor relations and tried to get them to comment on their backlog, but I have failed so far. My numerous calls to the CFO Bruce Cannon have not been returned. Current SPTR investors may want to keep this in mind though. Hence, a good chance that their backlog has deteriorated. Also, I think they would have tooted their horn with their growing backlog in their press statements if this was _not_ true. Just to show the investment community that things were fine at SPTR and it was just Corning that was having a problem. >>Also,I may be wrong, but doesn't the tax code >>require you to put start-up costs against capital >>and not expense? Yes you are wrong here. Taxes and accounting are two different animals. The IRS does not care how you prepare your financial statements, but the SEC and investors do. If SPTR had to capitalize start-up costs I would see that as something "fishy", or agressive accounting as is commonly called. Instead they have expensed the start up costs and adopted a conservative accounting approach in my opinon, and I give them credit for doing so. BTW, they also expense the royalties that they pay. Many small companies employ agressive accounting policies and inflate their current earnings and sooner or later this will show up as an earnings shortfall. Some of you will remember some time back AOL was caught capitalizing marketing costs as against expensing them. They admitted mea-culpa and changed their accounting policy to expense marketing costs.