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Gold/Mining/Energy : Image Processing Systems (IPV-TSE) -- Ignore unavailable to you. Want to Upgrade?

To: D. Peter Vanderlee who wrote (409)	8/31/1998 1:55:00 PM
From: Luc N.	Respond to of 658

Considering the high losses and poor past performances, obtaining any type of financing will be difficult. I tend to agree with John, this company is in difficult financial situation. The problems in Asia won't help either.

To: D. Peter Vanderlee who wrote (409)	8/31/1998 9:04:00 PM
From: John Wright	Read Replies (1) \| Respond to of 658

Peter, thanks for your informative post. It's always good to read opposing opinions. Here's a few additional points from the other side: >>>through Mr. Graham's efforts, an ongoing capacity to raise money at fair value through good times and bad.<<<< I have to disagree here. Over the past few years IPV was making the transition from development stage company to one that ultimately had real products to deliver. After a good degree of initial success with their new product rollouts, Mr. Graham managed to tap the equity market to finance the company's growth and the Tisma purchase in a period where the companys business outllook and conditions were positive and easily conducive(e.g. healthy margins, almost b/even, and an exponential increase in sales) to raising more cash. I would say the present company status is the first time that can be classified as "bad times". >>>>Aside from proving it can develop innovative products on an ongoing basis, the company has built an impressive global sales, distribution and support infrastructure, its technology is increasingly used by a wide variety of name brand customers (repeat sales) worldwide, it has a strong and growing order book and it is penetrating new markets (auto glass) in addition to taking leadership of current markets (television and computer monitor inspection systems and high speed packaging)<<<< Peter, I agree with you here on many points, however their existing markets seem to be softening and we still haven't really seen the 'trojan horse" product that will drive sales higher on an ongoing basis. Their existing product line still seems to be a bit on the "made to order" side. >>>>the company has an experienced and capable management team and proven development, engineering and sales capabilities.<<<< Maybe "proven development & engineering" experience, but when it comes to fiscal management and financing company growth Mr. Graham has failed the company and shareholders in a big way. Although he certainly hasn't seemed to fail rewarding himself or his relative. The Tisma acquisition, although strategic long-term, was a massive waste of limited capital. Whatever happened to acquisition due diligence?!!! The magnitude of the subsequent goodwill and inventory write-downs are unbelieveable and a joke! >>>IPV is highly attractive to experienced capital providers <<<<< Have to disagree here. If I was being the most extreme optimist I would concede a convertable debenture but the issue would also have be so watered down as to end-up leaving existing shareholders shafted bigtime. The raging bull we've had over the past 5-10 years has provided the conditions where only absolute morons could fail. Times are now a changin'. Being a 29yr old psuedo experienced know-it-all MBA won't cut it in these capital markets and economy anymore. Hard and well researched decisions will now start being made. Under these conditions, IPV will not get their cash in my estimate. Receivership within 6 months. John P.S. On another topic. I'm trying to estimate what type of impact the new market lanscape will have on job losses in the financial/banking industry in the next few months. 20,000, 40,000...?(excluding Bank mergers). Any estimates? The party is over and very scary times ahead. Seems to mirror the ol' bull in real estate a few years back.

To: D. Peter Vanderlee who wrote (409)	8/31/1998 10:25:00 PM
From: mariner	Read Replies (1) \| Respond to of 658

Peter I agree they have interesting tech, particularly on the IPS side. I'm less convinced of the Tisma product. I have to disagree that refinancing will be easy. Stock issue: out of the question w/o huge dilution. Long-term debt: interest rates are rising, capital is looking for safety. Who will lend it? Convertible DBs: pretty much the same as for L-T debt. Given the huge drop in junior equities, I think the smart capital will be going towards those small companies that have been unfairly punished. IPV doesn't fit here. Their performance has been very poor. Sales are likely to slow, and they have already indicated this is happening in Asia. The marketing infrastructure you refer to strikes me as very high cost. I believe the recent quarterly statements showed a large increase in selling/marketing expenses. Margins have fallen drastically. So, where do we go from here? I believe that unless a venture capital firm jumps in with an equity infusion, that someone will take them out. The tech (as you point out) has merit. It seems likely to me that IPV simply does not have the capital to ride out the coming downturn. If they had a stronger current ratio I would not be so pessimistic, but it looks to me like they'll be cherry picked for about a dollar a share by someone who wants the technology and who has the capital to continue developing and marketing it during a slowdown. IMHO