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Technology Stocks : PROGRAMMER'S PARADISE (PROG) -- Ignore unavailable to you. Want to Upgrade?

To: eik who wrote (783)	2/23/1999 5:49:00 PM
From: KellyW	Read Replies (1) \| Respond to of 2383

PROG's CFO responds to the "Mark Johnson" article: Kelly: Sorry I haven't had an opportunity to respond to your e-mail. Bill (CEO - Willet), and I having been conducting a number of meetings with both Investors and potential investors. Having read your article, I feel compelled to attempt to rein you back in. Bear in mind that our business is cyclical. Q4 is always the strongest and then business does in fact drop off in Q1 and then rebounds again in Q2. Your estimate for Rev's in Q1 is very aggressive. To do $77M would be a 45% increase, year over year. That being said, there are some interesting things going on in our channel and within our Company. There is no question that the Internet is a top priority and to date, the new site is generating some solid business. As I told Zeev Hed on the telephone, we could easily pass our "internal" estimate of $10M for 1999. That total could be $20M although Zeev thinks it will be $30M. From a product release standpoint, 1999 should be an exceptional year. Platinum, which acquired Logicworks last year is looking to introduce their products into the channel through us. Sun Micro is very excited about their dealing with us and wants to develop a joint marketing program to drive more platform supporting products into the channel through us. Some of the other vendors outside of Microsoft such as Sybase, Sheridan, Inprise and Lotus have all indicated they have significant new products to unveil this year. On the International front, we have taken the lead man from the Dutch subsidiary and given him responsibility for all of Europe. His charge is to adopt the Dutch selling philosophy (which basically stated is to help manage the customers IT spending and teach them ways to reduce costs)at each of the other European subsidiaries. The Dutch subsidiary, so you know, runs their corporate reseller operation at approximately 13% margins. The German operations by comparison run at significantly lower margins. One of our goals for 1999 is to enhance these margins even if 1/2%. So my message is that the business environment looks fundamentally sound. Global economics can be a factor as can delays in new software releases. Not to sound like the Risk Factor section of a prospectus, but understand that there are inherent risks. I maintain that your estimates for Q1 are aggressive. I see our business building throughout the year and culminating in a historically strong Q4. Best regards. John John P. Broderick Senior Vice President and Chief Financial Officer