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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: John Arnopp who wrote (1087)	2/11/1998 4:59:00 PM
From: William R. Polk	Read Replies (1) \| Respond to of 4467

John: I don't know about the "good call". I was using the # of shares from the last 10Q which was 10.4 million. On a fully diluted basis OAOT has 12.4 million shares. The "extra" 2 million shares made for a significant difference (8.8 cents vs. 7.4 cents) A couple of observations: First, direct costs (labor) as a percentage of revenue dropped for the first time in a year (they had been constant at 78%) They were 76.8% last Q. Second, SG&A was up slightly but the reduction in labor cost helped keep margins relatively constant over 3rd Q. Interest expense is way up. In fact it doubled quarter to quarter. I don't know what's behind it. Expansion? Acquisition of UniHealth? Something to keep an eye on. Bottom line. Although some might focus on the flat earnings (.07 vs. .07) quarter to quarter, if you go behind the numbers a little you can see that OAOT management delivered what they said they would: >40% revenue growth and >30% earnings growth. Bill