Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Rick Bullotta who wrote (21186)	7/27/1998 5:12:00 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 31646

Rick, earnings of only $0.07 are easily achievable this quarter. Remember, TAVA does not have to pay any taxes this quarter! IMO, it is next quarter that will be the huge disappointment. This quarter we should expect to see a significant step-up in revenues as Y2K becomes a much larger percentage of TAVA's business. Last quarter, Y2K increased dramatically to over $3.5M in revenue, but the overall increase in revenues was small, since their core business declined so precipitously. Shouldn't TAVA report Y2K revenues in the $7M to $9M range? Including core business of about $8M, TAVA should report approximately $16M in revenue (See Note 1). TAVA has significant tax loss carryforwards (approximately $3.7Million), so they do not have to pay any taxes for sometime. This is a boost to earnings for this quarter. My estimate is: Y2K Revenues $8M Core revenues $8M Total Revenues $16M Cost of Sales $8.24M (Note 2) Gross Margin $7.76M SG&A $5.0M (Note 3) Software Amortization $0.5M (Note 4) Interest Expense $0.15 PreTax Income $2.1M Taxes $0.0M Net Income $2.1M Fully Diluted Shares 25M Income per share $0.08 Regards, Bill Notes: 1) TAVA claims almost half of their Y2K orders were for tools. If this is the case, TAVA should report revenues of $22M to $23M. I believe TAVA is really a consulting company and this PR is misleading. 2) Estimated Gross Margins: 37% for core business, 60% for Y2K consulting business. 3) SG&A. This is a 20% increase from the previous quarter. This includes additional sales expense and ramp-up costs. 4) I believe TAVA needs to substantially increase their software amortization expense: exchange2000.com