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Technology Stocks : ATC Communications ATCT -- Ignore unavailable to you. Want to Upgrade?

To: Northern Marlin who wrote (2556)	5/18/1998 8:42:00 AM
From: Northern Marlin	Read Replies (1) \| Respond to of 2636

Regarding prospects for the 6/30/98 quarter, below is an exchange that I had on one of the message boards: Subject: Re: ATC ($0.04) 3Q98 Date: Mon, May 18, 1998 00:27 EDT From: JMARTISEK Message-id: <1998051804271800.AAA22372@ladder01.news.aol.com> From the conference call, management advised that the month of March, 1998 was the best single month in the past 14 months. Well, here is the income for the past 5 quarters: 3Q97 $24.5 million 4Q97 $21.5 million 1Q98 $20.5 million 2Q98 $23.1 million 3Q98 $21.1 million The average income for the 3Q97 is 8.16 million monthly, which falls in the 14 month period. Management indicated that the trend looked positive going into April, May and June. Based on the optimistic outlook, lets say income increases 1 Million monthly. Our revenue now looks like this for 4Q98: April 98 $ 8.16 million May 98 $ 9.16 million June 98 $10.16 million Total 4Q98 = $27.48 million. Using this figure for gross income and considering management's steps to reduce operating cost, what is your best estimate for earnings in 4Q98? John Subject: Re: Sales Forecast Date: Mon, May 18, 1998 07:07 EDT From: Phlailers Message-id: <1998051811075401.HAA07855@ladder01.news.aol.com> John, I read your post with great interest. Before we begin to talk about earnings estimates for the 6/30/98 quarter let's debate your estimate of $27.5 million for revenue. First let me throw out three observations: 1. During the Q & A portion of the conference call Wilson Yagley of Southwell Partners asked for guidance regarding profits and revenues for the 6/30/98 quarter. CFO Waller answered that they certainly expect to break even, possibly even make a profit. In regard to revenues Mr. Waller would not comment. During the conference call for the 9/30/97 quarter Mr. Waller indicated that ATCT's breakeven point is $23 to $24 million. This would seem to indicate that they expect revenues around $24 million, give or take a million. 2. Revenues for March, '98 were said to be a 14 month high. That would include February, '97, but leave out January, '97. I listened to the conference call for the 12/31/96. Referring to my notes of that call, they were very optimistic about their prospects for the 3/31/97 quarter based on major growth in January, '97. Of course, the conference call was on 2/10/97, and shortly after that AT&T began to pull back on their outbound work, and they lost the AOL and GTE accounts. This would lead me to believe that January, '97 was the best month of the 3/31/97 quarter, maybe $9 or $10 million. 3. When reading the 10-K's for any of the teleservice companies one always comes to a paragraph that describes the seasonality of their business. Traditionally the 6/30 and 12/31 quarters are their strongest. If anything, I would expect revenues to taper off sequentially from April to June as the company approaches its traditionally slower revenue quarter. Also, COO Allen stated that the momentum continued after March into April. He did not say that April was a better month than March. Based on the above points I expect ATCT to have revenues for the 6/30/98 quarter ranging anywhere from $23 to $25 million. If they come in on the low end of that estimate they may lose $.01/share. If they come in at the high end they could make $.01/share. A good indication will be the First Call estimates. Steve Murphy of CICB Oppenheimer is the only analyst currently giving estimates. He has been on at least the last three conference calls, and his estimates for the last two quarters have been correct. He currently is showing an estimate of -.01/share. I'll be watching weekly to see if he makes any changes. Phil