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

To: RAVEL who wrote (21407)	7/30/1998 5:04:00 PM
From: george saintonge	Read Replies (2) \| Respond to of 31646

TAVA...Giftwrapped at 5 3/8 today...couldn't pull the trigger on my level 3 fast enough...got 1900 there and another 1000 at 5 5/8...for all you agressive sellers I'll be there again tomorrow...I figure about a 75 % retracement off the high should just about do it...as far as your numbers go...fine, I'll buy a stock at 5 times earnings that is signing major contracts (CHEVRON, COKE). 17 months to go on year 2000.

To: RAVEL who wrote (21407)	7/31/1998 12:51:00 PM
From: CalculatedRisk	Respond to of 31646

RAVEL, excellent! A few comments: 1) Core business. Perhaps you have underestimated TAVA's core business for fiscal '99. I have been using $8M per quarter. 2) Y2K revenues. This is the largest difference in our estimates for '99. There are two reasons for the difference. First, I have assumed that there is a slower ramp in TAVA's Y2K business. For the quarter just ended, I used $8M ... up from $3.5M. For fiscal Q1 '99, I was estimating $15M. Second, based on Jenkins comments, IMO TAVA's maximum potential per any quarter is $25M. You show TAVA generating $41M in Y2K revenue in Q4 '99. 3) Gross Margins. I used 37% for the core business and 60% for Y2K. It looks like we are very close. 4) Taxes. TAVA will still have some tax loss carryforwards in Q1 '98. This will increase your estimate a little. Currently they have about $3.4M in carryforwards. Here is a comparison of fiscal Q1 '98 using our assumptions: .............. Ravel ........ CR Core Business.... 6.0......... 8.0 Y2K Revenue... 22.0........ 15.0 ..Total Revenue. 28.0....... 23.0 Cost of Sales.. 13.1....... 11.0 Gross Margin... 14.8....... 12.0 SG&A............ 8.7........ 7.0 D&A............. 0.5........ 0.5 Operating Income 5.6........ 4.46 Interest Expense 0.13....... 0.15 Taxes............. 2.1........ 1.1 Net Income...... 3.4........ 3.2 EPS........... $0.14...... $0.13 Of course, I consider my estimates "optimistic", and you consider yours "conservative"<g>! But the major difference is in the Y2K revenue numbers. I'll be hiking in the Sierras for a few days ... look forward to further discussion! Regards, Bill