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

To: Flora Wood who wrote (510)	11/23/1998 7:31:00 PM
From: John Wright	Read Replies (1) \| Respond to of 658

Flora, as always, thanks for your response. A few follow-up points to your comments. >>>>Gross margins have improved in Q2 to 30%.<<< Correct, but year over year margins are still off about 20% points. >>> Given that virtually all the Q2 sales came from Tisma (and yes, we're reporting on a consolidated basis) and given that the average for the packaging machinery industry is 25 - 30%, the Q2 number does not indicate gross squandering of resources<<<< The term "squandering of resources" refers to company performance as a whole over the past year. I apologize if I wasn't clear on this. I'm not sure I would ever use the term "squandering" to necessarily characterize a single quarter. However, I would argue that the term does adequately describe IPV performance over the past year. Certainly one could argue or debate the Tisma Goodwill write-down, inventory write-offs, and current Q2 '99 Balance Sheet(cash position) along these lines. >>> If you take the S G & A numbers apart, only the sales category is a big increase and that refers to a one-time adjustment where we resolved a bad debt in Korea for $500k. <<<< For Q2, year over year, selling is up 50%, marketing about 25%, Engineering about 50%, and Finance and Admin. about 30%. So I'm not sure why our numbers disagree. Perhaps you're comparing Q2'99 over Q1 '99? COmparative Income Statements are usually formated Q2 to Q2 year over year. >>>but don't overlook what's been accomplished already<<< Flora, I certainly try and do this but if you're a shareholder and your holding a stock that is now trading at 25% of what it was a year earlier accomplishments become somewhat muted. I still find it hard to reconcile increasing Mr. Graham's compensation by 30%(??)in light of this. But I guess this is just my opinion and open to debate. >>>And yes, watch the next two quarters.<<< I'm still on the sidelines looking for reasons to jump back on board. However, for now I think the prudent course would be to "wait and see". I think I'd rather be a little late than a bit tooo early on this one. On a final note, thanks again for your contributions to this thread. Hopefully we can keep objectivity on both sides of the fence, so to speak. Bye for now, John