Patricia,
Thank you for posting the conference call number. Me being a relatively new investor in IMRS, some highlights listed below may be already well known to some if not most of you so please bear with me.
Satish is very upbeat about results this quarter, said it was better in terms of progress towards achiving goals than last two quarters combined.
IMRS currently has 70 Y2K projects but only started one new Y2K project this quarter, wants to move away from Y2K since they have 55% of their accounts in y2K business right now. With each Y2K account their goal is to finish compliance work by mid 1999 then seek a long term relationship with that company in upgrading their other systems.
Satish says it is not worth the effort right now to develop new Y2K business in terms of margins and what would have to be sacrificed in terms of other business. There is little or no difference in operating margins between Y2K and other IMRS business.
Involved with six major industries at this time, insurance, banking, retail and manufacturing (forgot the other two), they all have common problems that can be solved by IMRS.
This quarter IMRS set up five new branch offices in the U.S. including Los Angeles, Denver, Minneapolis (forgot the other two). Also two new ones in Australia and the United Kingdom.
Great quarter, 119% increase in revenues, seq quarter growth is 15%, 46% of 1997 business done in first quarter 1998, % revenue from U.S. decreased from 78% to 76%, international increased from 22 to 24%, tax rate is 29%, 31% in 1996, slight depreciation of rupee, no big impact, works to their advantage.
Europe, UK, american greetings, isp planning multiple projects.
1729 total head count, focus is on increasing efficiency and productivity, 300 people in Bombay office, IMRS benefits from depreciation in rupee, New Delhi office set to open in a couple of months.
This quarter was able to do more work per person, revenue per employee went up about $2000, more pleased with this quarter than previous 2, everything has come together this quarter.
Met with 90 CEOs this past three months, focus is to get Y2K behind them, use Y2K to create new business, IMRS will be able to double capacity once Delhi is on line.
Not worried about poaching of employees in 1 and 2 quarters of 1999, will hire more people as needed. 70 Y2K projects in 1998, plans to convert 85% of them to transformation and reengineering projects (not Y2K).
Plans to be Y2K compliant on all 70 projects by mid 1999, take care of current contracts, 13 of every 15 Y2K will become new business, not pursuing pure Y2K work, only has a few of those.
On bidding projects, not much competition to worry about, make estimates and execute, do not pay attention to competition, let them worry about us.
Great news coming next quarter, press releases in next couple of months.
Sees increases in pricing and margins, little senstivity to Y2K, 28 new projects started this quarter.
Acquisitions in the works, actively involved, have already looked at 30 companies, needs to be a good fit, hard to find good fits, will make announcements soon.
Sees no problems with Y2K litigation.
Plans to systematically sell 1% of his shares every quarter, the price or time at which he sells does not matter.
Six new U.S. customers last quarter, 3 or 4 new customers in Europe, contributed about $2 million to revenues this quarter.
Backlog is up substantially in all areas, only one new Y2K, backlog growing faster than revenues.
John Carson |
