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Technology Stocks : BORL: Time to BUY! -- Ignore unavailable to you. Want to Upgrade?

To: David Miller who wrote (10063)	4/21/1998 10:15:00 PM
From: Bipin Prasad	Respond to of 10836

David, Oh my, even David made a tiny mistake. 8^) Great job, David! later, BPP

To: David Miller who wrote (10063)	4/21/1998 11:14:00 PM
From: shane forbes	Read Replies (2) \| Respond to of 10836

David: They were not specifically asked about the revenue shortfall but Del mentioned problems in Japan in opening statement. ---- My guess for the reasons from the c.call for the revenue shortfall: (1) Direct Reason - Japan. (2) Indirect Reason - New longer sales cycle because of enterprise sales. Japan sales dropped to 50% of FY1997 run rate! That translates to about the missing 3 million Q over Q. For BORL it affected their retail business primarily. Sales evaporated in last 6-8 weeks of q. Second I think they emphasized that the sales cycles are much longer now since the company when it has to sell enterprise solutions has to go out and do some "in depth training" and "selling at the strategic level to CEOs and Boards of Directors". Kathy mentioned that it could go to as much as 30/60/90 days. Compare this with desktop - send to retail - consumer buys - done. I think the sales cycle just got extended big time! For instance in another area they mentioned DSO is going to be 60-90 days - in the past it was 30-45 days. Longer sales cycles in the q of transition means revenue gets hit. ---- [As a side comment what they say about Japan is what I've been hearing all over the place. Things are really bad over there. FY ends there March 31. According to BORL, whereas usually there is money left over to sustain a surge in spending, this time there was none - in fact over the last 6-8 weeks in the q money evaporated. Secondly on the retail level, they say that in gen'l across the board in the economy there (not just BORL) retail business is down 40% YOY.] ---- Overall the c.call went all right. The LaSalle guy congratulated Del on the job done and once again the story of "more recognition on the street" came out. They'll be doing a big sell on Apr. 29 and then commencing the week later all over the place - Japan/SAmerica/Europe etc etc. Overall sees lots of new "investor" and "institutional" interest in the firm right now. Gut feel tells me stock sells off tomorrow though unfortunately. Not enough hoospa to sutain 11 1/2 or 11 for that matter. ---- Longer term is the company fundamentally on track? I think the answer is a strong yes. Though I had my doubts that they hit a minefield before listening to the call those doubts are "assuaged" now. I think they'll be fine and are proceeding well. Not much one can do when Japan goes no mas! Also I've seen this before when companies do acquisitions they generally take quite a bit of time to be integrated well with the acquirer. In BORL's case they are biting off much more than they can chew at the moment and it may have stung them this q. Longer term I'm still feeling good. He now calls the transition a transformation which is a better description. ---- On a favorable note those large enterprise deals keep coming in. A couple of million+ dollar deals and "a great many" 6 figure deals. Also even better news there are "deployment licenses" that follow up the initial roughly 4 month initial roll-out deal - translated more money more money. App servers is a new business area that they are getting into. Estimated size of market 925 million in 2002. Characterizes turnaround as "partially complete". If someone does not I'll add details later. ---- [Heard a mention of 8-10 quarters instead of the oft mentioned 6-8 quarters. Heard that in passing. Though earlier during the call he did reiterate 6-8 quarters. Did not bother me one bit. I'm here for the really long haul. This stock will be hitting 35 bucks sometime in the next 2-3 years and I don't have a problem hanging around.] ---- Shane.