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Technology Stocks : Command Systems, Inc. (CMND) -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (1679)	11/3/1998 12:59:00 PM
From: JEFF BERRY	Read Replies (1) \| Respond to of 1956

<<< Since cash balance has remained the same or risen slightly is there not the possability that they have adopted a FASTER writedown of intangible assets (into SG&A) in the last 2 qtrs? >>> JDN, No this is not a possibility. The only intangible asset on the books is goodwill in the amount of $6,845,000, originally booked on 12/31/97 for the purchase of the remaining 49% interest in the Bangalore facility. It is being expenses over 15 years. The income statement for Q1,Q2,&Q3 clearly shows $114,000 in amortization expense of goodwill for each qtr. Correspondingly, the goodwill asset has been reduced on the balance sheet by $114,000 for each qtr. <<< Has the 10Q come out lately? >>> The 10Q for the 2nd qtr was filed in August. It discusses the increase in SGA expense. It states: "The loss from operations for the three months ended June 30,1998 was primarily due to increased selling, general and administrative costs associated primarily with the company's increase in sales and projected management personnel which were not accompanied by expected growth in complete projects and solutions business" The reason cash, cash + a/r - liabilities, and shareholder equity have remained virtually unchanged is that operational ramp up expense reflected in increased SGA, has been funded with company profit. Income for the nine months ended 9/30/98 was breakeven. However, $342,000 of recorded expense is amortization of goodwill. Thus it does not affect cash or tangible assets, it is strictly a tax loss. JDN, If Command is to grow revenues at a 30%-50% clip, then SGA expenses that we are seeing for Q2 & Q3 are reasonable. It's revenues that need to catch up with SGA expense.......I expect SGA expenses to remain near $3,000,000 for the 4th qtr. However, I also expect to see revenues in the 4th qtr. begin benefiting from the SGA investments of the 2nd & 3rd qtr's. I expect that natural growth in staffing revenue will be be augmented with completed project revenue resulting in total revenue increase for the 4th qtr. over the 3rd qtr. of between 2,000,000 - 3,000,000. Which would result in net earnings of between .05 and .08 a share for Q4. Best Regards, JAB