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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Raymond James Norris who wrote (18051)	6/5/1998 3:59:00 PM
From: JDN	Read Replies (2) \| Respond to of 31646

To All concerned Frustivites: Follows is a rather long post (just a warning). I have to this date been unable to secure a copy of the latest Hannifen Imroff earnings estimate for TAVA for fiscal 1999 (y/e 6/30/99) which I am told shows $1.10 per share earnings. So, I have decided to try and make a rough projection of my own not necessarily for accuracy as I dont feel I have enough data for that, but more to determine IF the latest estimate is doable and in the ballpark. I believe that it is, but have decided to post it here for any of you to rip and tear at it and see if we can come to an agreement as to what is reasonable. The overall assumption in the following estimate is One, that TAVA will be able to work steadily off of a backlog meaning little downtime. All other assumptions shall be spelled out to the best of my knowledge. Gross Margin: 400 engineers 40hrs a week, 50 wks a yr, $125 an hour billing rate equals $100,000,000 at 55% gross margin (I believe management has said gross margin is between 50-60%) equals $55,000,000. Hardware sales of $35,000,000 at 10% gm equals $3,500,000 (the 35mm was supplied to me by a source I cannot name and the 10% rate was supplied by management in CC's Gross margin TOTAL------------------------------------$58,500,000 SG&A--------------------------------------------------------------13,500,000 SG&A is just my estimate. this figure is variable only to the extent they have commissioned sales and I am not sure service revenue carries any commission Pretax profit----------------------------------------------------$45,000,000 taxes at 35%---------------------------------------------------$15,750,000 Net income after tax----------------------------------------$29,250,000 Fully diluted outstanding shares------------------------ 25,000,000 Earnings per share 6/30/99-----------------------------------------$1.17 Items I consider to be conservative: Revenue--I did NOT consider cd-rom sales, license fees, royalties, "hits" to the data base. Billing rate--In CC's etc. I have come to believe that their rates are $150 an hour and rising. Hours worked--I have presumed any overtime would offsett any downtime and set up time. Number of billable professionals--I used an average of 400 throughout the year, however I believe that once they complete the hiring of 150 engineers that may bring them to 420 early in the new year. Ok, there you have it. Print it out, study it, argue it and MAYBE as a group we can arrive at an UNARGUABLE position as to what we EXPECT in the upcoming year. JDN