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

To: Thomas Kirwin who wrote (432)	6/15/1998 7:04:00 AM
From: Bob Davis	Respond to of 601

Guys, To clarify a couple of points which have been made on this forum recently: My reading of John Dutton's comments that "our operating expenses are effectively flat" is that he is stating that operating expenses for each of their current businesses are essentially made up of fixed costs (salaries, occupancy, overhead, etc.) which don't change much from quarter to quarter. However, revenues and their associated costs of goods sold are very seasonal, with the bulk of them coming in the last two quarters of the Company's fiscal year. As a result, the Company should operate at breakeven, or at a slight loss, during the first two quarters, but make it up in the third, and especially the fourth quarter. He is clearly not saying that operating expenses will continue to remain flat in the face of internal growth and acquisitions. In fact, the reason that they rose 81% versus the prior year is the acquisition of MLP. Sorry to contradict you, Tom, but I expect that, going forward, operating expenses for the current TASA businesses will decline in the third and fourth fiscal quarters as a percentage of total sales or revenues. I'm a bit confused about the share-count issue. For the first quarter, TASA had an average of 8,447,000 shares outstanding, and had 8,489,322 outstanding as of March 5, 1998. The most recent press release indicates that there were an average of 8.49 million shares outstanding during the second quarter. Thus, it does not appear that a significant number of shares have been issued recently. In addition, TASA's buyback announcement did not commit them to buying any stock, but simply opened the door for them to do so. And, if they had bought any, it would show up as treasury stock until they retired it, so shares outstanding would remain the same. This will be clearer after the 10-Q is issued. On a year to year basis, weighted average shares outstanding have grown from 8.11 million to 8.49 million, an increase of 4.7% which does not appear excessive. Lastly, there was no "$200,000 write off" - as Tom has explained, this was a recovery of a previously written-off indebtedness. Bob Davis The Napeague Letter napeague.com