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To: phbolton who wrote (9754)	4/10/1998 4:57:00 PM
From: Bill Harmond	Read Replies (2) \| Respond to of 27307

It's there. $17.8 Million in new net cash generated in the quarter. Their cash balance grew by $17.8 million (say $16 million from operations) and they didn't raise any capital. Operating leverage is really kicking in now. Operating margin grew to 12% from 5% sequentially....more than double. G&A expense fell to 7% from 13%. Sales & Marketing expense decreased to 53% from 60%. Morgan Stanley is projecting a 19% operating margin for 1999. Deferred revenue grew to $10.1 million from $4.9 million last quarter. They buried $5.2 million on the income statement, but it still had to show up as cash flow...that's my "little Microsoft" angle. These are simply great numbers. The bottom line is how much free cash a business generates.