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Technology Stocks : Command Systems, Inc. (CMND) -- Ignore unavailable to you. Want to Upgrade?

To: lbs who wrote (324)	4/29/1998 2:56:00 PM
From: JDN	Read Replies (1) \| Respond to of 1956

Dear lbs: Look I cant guarantee the future and I dont at this moment know who the prevaricators are but I have been around the block a few times. While this is the most extreme example I personally have witnessed it is NOT unusual for an analyst to get a burr under his saddle and say a lot of things he doesnt REALLY mean just to get back at management. It my OPINION ONLY that to teach them a lesson this analyst took a small part of the press release and highlited it to mean something it never was intended to mean just to get even. Now if they are alluding management is corrupt or something then they ought to issue a SELL not a neutral. No person in their RIGHT MIND would issue anything lower than an accumulate when stock is selling below cash and receivable value. JDN

To: lbs who wrote (324)	4/29/1998 3:13:00 PM
From: Harami	Read Replies (1) \| Respond to of 1956

Here is why the stock is down - I replayed the conference call, jotted down all the numbers that were mentioned and did the following. CMND is actually LOOSING money in their US operations. Calculations are straight forward, using the numbers provided. Here it goes- Q198 ($$ in 000s) India US Total Revenue (List) 2,380 5,554 7,934 Note 1 Gross Margin 1,309 1,515 2,824 Note 2 SG&A 690 1,467 2,157 Note 3 Goodwill (Allocated) 34 80 114 Note 4 Earnings 585 (32) 553 Note 1- Revenue from Indian Operations was 30% of total per Conf call Note 2- Gr Mrgn for Indian Ops was 55% (per call), total was 35.6%, so back into US gross Margin Note 3- SG&A was about 28% Note 4- Goodwill is allocated. If you put all of it in US, then US loses more money Here are my conclusions/thoughts- 1. US operations will continue to be tough for CMND and they will be lucky to breakeven. 2. Indian Operations has 180 people (165 billable) and a capacity of 225. That is, they are getting about $16k of revenue per Qtr from a billable Indian programmer. 3. In the conf call, the CFO mentioned that they will hit the capacity in India in Fall (i.e. Q398). Therefore, more investment in space in India in the near future. 4. If they hit the capacity in India in Q398, they will have 45 more people than they have now (180 moving to 225). 5. Assuming 90% of these additional 45 are billable at $16k each, we can expect another $500k in pretax earnings from India in the next SIX months. Since US is breakeven, at 25% overall tax rate (per conf call), and 7.7 Mil shares outstanding, this amounts to only 5 additional cents over the next six months. .... Now we know why the market is reacting this way...