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Microcap & Penny Stocks : TASA. Can someone with KNOWLEDGE help!!!! -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (431)	6/13/1998 12:20:00 PM
From: Thomas Kirwin	Read Replies (1) \| Respond to of 601

Initial News Release Analysis Timba, You raise some very good questions regarding Touchstone Applied Science's quarterly earnings release. Here is my humble attempt to answer your concerns. You state.... <<I don't understand how operating expenses are claimed by Dutton to be "effectively flat" and yet the report says they rose 81% in the last 6 months over the same period a year ago.>> Chris Nevil responds.... <<TimbaBear, my interpretation of the "flat" operating expenses statement was going forward versus the most recent quarter. <eom>>> You indicate..... <<I understand, Chris, that that is exactly the impression that was intended..... I just don't see the justification for it>> <<How can operating expenses be essentially flat when they are acquiring Drake this year? How can operating expenses be flat when TASA's avowed goal is to triple revenues in the next 3 years, part of it through acquisitions?>> My cut..... Going forward operating expenses may be flat when expressed in relation to total sales or revenues. I expect operating expenses to remain flat during the third quarter. Once Drake Business School (DBS) is acquired this number will undoubtedly grow. My hope is that the ratio of operating expenses to sales and gross profits remains flat. You ask..... <<I also don't understand how come there are 380,000 more shares outstanding when they announce a stock buy-back.>> Short answer is that the stock repurchase program was approved but has yet to be implimented. Outstanding share growth may be a result of stock incentive options being in the money thereby affecting the average outstanding share calculation. Perhaps the stock issued in leiu of cash to TASA's Public Relations Firm and Investment Advisor is the answer. Note - Outstanding shares appear to have grown 380,000 when compared on a quarterly basis as of April 30th. QTR QTR Six Months Ended Apr. 30, Apr. 30, Apr. 30, Apr. 30, '98 '97 '98 '97 Shares Outstanding (millions) 8.49 8.11 8.47 8.00 You ask..... <<where did the $200,000 write off come from?....I didn't see that mentioned in the last report as a possibilty for this quarter.>> My read...... The $200,000 bad debt recovery was actually monies recieved by TASA in a court settlement from a previous loan note write-off totalling $400,000. Without this recovery the quarterly loss would have been worse. See press release dated Tuesday December 30, 1997 Message 3098042 "The Company has previously announced a third quarter write down of $2.0 million of the goodwill resulting from a 1997 acquisition as well as a write off of a $400,000 loan made by the Company's previous management." I look forward to reviewing the 10-Q for more insight. Hopefully Mr. Davis will chim in soon with his analysis. It appears as though TASA is on track to have a profitable 3rd quarter if sales materialize. It remains to be seen if the often promised "profitability" will be enough to offset the last two losing quarters? The jury is still out! Regards, Tom