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

To: Steve Woas who wrote (361)	4/29/1998 6:48:00 PM
From: jan m.	Read Replies (1) \| Respond to of 1956

Steve--At this point, I'd take any contract. Did management give you any indication that we might hear something positive soon? Jan

To: Steve Woas who wrote (361)	4/29/1998 6:54:00 PM
From: Harami	Read Replies (1) \| Respond to of 1956

Steve, it is easy to show profits in US by allocating the infrastructure costs to the Indian Operations. Since they are not required to show a separate P&L for offshore and US operations, they can "make" the numbers the way they want. Here is an easy way to look at it. They said in their press release that the overall Gross Margin was 36%. They also said that the gross Margin on Indian operations was 55% (conf call). Since we know that they got 70% of their revenue from US, the US gross Margins have to be around 27-28% - which is equal to their SG&A (see their press release). They are effectively breaking even in their US operations. In fact, pricing pressures came up during the conf call. They have been unable to pass on the higher salaries to the customers, hence lower margins...