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

To: JDN who wrote (18703)	6/18/1998 9:23:00 AM
From: Richard S. Schoenstadt	Read Replies (1) \| Respond to of 31646

JDN, The 14 cents for qtr 1 99 included a charge for taxes - even though as noted I suspect they may have enough carryover losses to protect income for the qtr. Without taxes it would be more like .21 cents. As noted I think it is important to determine how much carryover protection Tava has to get an idea when they will have to start paying on earnings. And whether or not this will result in a qtr. to qtr. drop in earnings at some time. The method I used for determining billing rate made no assumptions about hours billed. It's sort of built in. However if there is an acceleration in hours worked and billed for year 2k work, in the 4th qtr and beyond then this would effect my estimate. That's another question for Scott. Basically you and I approached the problem from different directions. You took estimated rates based on what the company said and estimated hours based on your own experience and new employees and figured out revenues based on that. I took what I figured was service revenue divided it by revenue producing workers to figure current revenue per employee per month for core work. I then used this to figure how many people were taken off core work and put on year 2k work. Used this to figure avg. monthly revenue per year 2k employee in the 3rd quarter. Multiplied by 1.2 to figure increased rates for year 2k work. And then used that figure x avg. new employees per quarter to figure revenue impact going forward. Of course this is all very rough. Since I believe the 50% I wacked off gross income makes this a pretty reasonable low end estimate of Tava's potential. For now anyway since I always revisit this stuff. I also have included slightly fewer workers then you. And hopefully Tava will increase beyond even what you estimate. RS