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To: Greg h2o who wrote (2436)	5/1/1998 1:15:00 PM
From: Michael Watkins	Respond to of 13797

A look on the brighter side... ALTS(E) hasn't had this much press in a long while... biz.yahoo.com Sorry, not trying to aggravate the situation, but I was simply amazed at all the activity. Unfortunately all from lawyers.

To: Greg h2o who wrote (2436)	5/1/1998 2:11:00 PM
From: jackhach	Read Replies (1) \| Respond to of 13797

Greg, These changes in GAAP rules with regard to income recognition (as you are aware)did not go into effect until Q1/98. I'm not sure if anyone on this thread has indicated that ALTS will/has somehow insulated itself from scrutiny because of such rule(s) changes; for it is a separate issue. I believe the only point both Bob, myself, and others have been trying to convey -- is that what ALTS was (or appear to be doing) in both 1996 and 1997 was not so unusual and in fact the norm in their industry. I was not suggesting that ALTS came under the auditors microscope because of rule(s) changes, again that is a separate issue. I offer that ALTS was attempting to secure additional credit, find a partner/acquirer, or go private. This prompted a careful look at the books -- and as such an investigation began. PW was forced to back off its' earlier numbers, simply because ALTS had been overly aggressive in recognition of forthcoming income (probably beyond what is GAAP allowed.) Adding fuel to the fire -- GAAP required companies to eliminate these practices effective Q1/98. The recent rules changes have no bearing on prior year(s) recognition of income (96' & 97') -- ALTS probably exceeded their liberty here, as it was, despite the liberal provisions in GAAP then allowed. These latest changes have forced the issue even more so, simply because ALTS counted on increases in current/forthcoming revenue to diminish/reduce the cannabolistic affect on revenues already recognized. This game is OK as long as it doesn't come to an end. In final and forever the optimist, I believe this nasty financial medicine will serve as both a wake-up call to ALTS management and require ALTS (and many others) to secure revenues on an "as-you-go" basis. This keeps sales reps and CFOs honest. More importantly it forces management to redefine their approach to the sales process. It places more emphasis on current time and less on previous sales accomplishments. Companies will now begin to demand/incorporate maintenance contracts as part of initial sales. -JH