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Technology Stocks : SSA (SSAX) BPCS/Client Server -- Ignore unavailable to you. Want to Upgrade?

To: MAURICE J. SADOWSKY who wrote (759)	4/14/1998 6:35:00 PM
From: RayV	Read Replies (2) \| Respond to of 915

Maurice emailed me this and I thought I would try just for the heck of it to cut and paste it. Thanks Maurice! Ray SSAX ANNUAL MEETING April 14, 1998 First--I had hoped to tape the meeting to insure that my comments would accurate but found that tape recorders were considered bad form--understandable and a position taken by many companies--the important thing (from my point) was to size up our new CEO, Wm. Stuek--so the tape recorder became secondary to the primary objective. I am pleased to report that Mr. Stuek passed his test with flying colors--he was business like--polite--listened to the questions from shareholders and responded in an easy and knowledgeable manner--I believe he is just the man to solve some of the customer and personnel problems the company has experienced. On technical issues he deferred to R. Shakir--that does not necessarily mean he does not understand the technical problems--just that he is not comfortable in this area--we will have to wait and see on this side of the business. Well that is enough on first impressions--now for the meeting--I will try to be an honest broker here and stick to the fact and my notes (such as they are). The meeting started at 9:00 AM Chicago time with Mr. Stuek presiding--The secretary announced that there were 27,519,000 shares voting or 58.05% ( I found that surprising). Mr. Covey had written a letter informing the Board of Directors that he was not standing for election to the Board--he was not nominated or elected as a Director (I assume that he also did not vote his shares which is now close to 27%--down from 33%--which would account for the low number of voting shares). There were five nominees to the Board with a representative by the name of Smith (from H&Q) as a new member to the Board of Directors--so its Stuek, Smith, Weaver, Cowell, and Filipowski. The next order of business was the approval of the employee stock purchase plan which was passed without discussion. Minutes of the 1997-1998 meeting were available for shareholder inspection and were approved without a reading of the minutes. Having dispensed with the formalities the meeting then was open to questions from the floor. Within the constraints of the meeting--the question and answer session was positive and open--no attempt was made to give a short or dismissive answer--where there were problems to be solved Stuek was straight forward in his answers as far as it was possible for him to answer. First question related to what I believe to be an accounting standard (SOP-97-2)--with the question directed toward what effect it would have on the company--The answer was that the effects would be minima--at least that is what I heard but not sure what it means--others will have to interpret it on the message board. Bottom line is it is not considered a big problem. Second question--related to company problems and plans for the future--The first item discussed was a the question of turnover of personnel--an industry wide problem in the high tech and software industry--Stuek stated that of the people leaving the company in the last year about 1/3 went to competitors--1/3 were dissatisfied employees--and 1/3 were company initiated terminations. For comparison, SSAX is slightly above the industry average of 25% turnover but the rate of losses are declining. Key executives, however, are staying with the company. Question three--related to the business effect of the year 2000 problem--Mr. Stuek does not see it as a major problem since there will be other area of growth replacing the YK2000 business--his comment was that he does not see it as a major factor. Question four--related to referrals from the big six consulting companies--the answer was that this is an area that the company is trying to rebuild---partnerships are divided into two areas with each of about equal importance--the first is the "distribution" sector (these are the smaller companies and affiliates)--the second is partnerships with the major consulting firms which has not been good. Both problems are being addressed and some announcements will be forthcoming but not until agreements are finalized. The final area is to strengthen the internal resources of the company--this includes the service as well as the sales area. It also includes the possible acquisition of other companies similar to the purchase of Acclaim. Mr. Stuek went on to amplify that currently about one site per day is going live--which he considers a major step in the increasing acceptance of BPCS. The number of implementation sites is causing some problems and the company is hiring personnel in this area--It is expected that the service sector of revenue will grow at about 38% on a year to year comparison. The Company is redrafting its Marketing plan and Organization--it is expected that an announcement will be made in this area next week. Question five--in response to the cash position of the company, Mr. Stuek stated that it is the goal of the company to increase cash reserves and that these reserves are expected to increase in each of the successive quarter this year. Question six--this question related to the Coopers and Lybrand agreement--it is not exclusive nor is it thought possible to have an exclusive agreement with an independent consultancy-- conversation with Coopers and Lybrand are continuing with expansion in Japan and China targeted. The major area of SSAX far east marketing have been Australia and New Zealand- the VP for that area is being transferred to Tokyo and will also have and office in Beijing. Question seven--related to market share and growth--Mr. Stuek stated that SSAX would not attain market growth in the 50-60% range as some software companies have reported--he did think that SSAX could and would grow relative to the market despite recent disappointing results in Q1-98 for the Licencing sector. Stuek stated that the companies image had been damaged during the implementation its previous versions of BPCS and that the repair of this damage is a major part of the marketing and service business plan. An equally important goal is to restore the profitability to the bottom line. Question eight--It related to the Board of Directors--intention is to stay with a five member board. Question nine--a question about the service activities--again Mr. Stuek repeated the expected growth of this sector at about 38%--this growth will be internal. It will be centered on BPCS--it is not the intention of the Company to enter the consulting business or to work on products not sold by SSAX marketing. I was again stated that China and Japan are major long term targets for the company--the company is a major factor in three South American countries but does not see major opportunities beyond these areas. Question ten--related to coverage by Wall Street of SSAX--at present there are five brokerage houses covering SSAX--the company is talking with several companies which may start covering SSAX--one company mentioned was Morgan Stanley. Question eleven--related to the big six consulting companies and how the Gartner group now rates BPCS software--Mr. Stuek stated that a new report is expected very shortly which should be positive for SSAX from the Gartner group. As related to recommendations by big six consulting houses positive earnings are seen as very important to improving this sector of the marketing plan. At this point--there were no further questions and the meeting was adjourned. After the meeting the writer had an opportunity to talk with another shareholder who will be helping me with the accuracy of this report. He was equally impressed with Mr. Stuek's knowledge of the companies affairs and commitment to a successful rebuilding of the corporate assets.