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Gold/Mining/Energy : Com Dev International -- Ignore unavailable to you. Want to Upgrade?

To: Ron Schier who wrote (47)	3/13/1999 4:51:00 PM
From: J. Kerr	Read Replies (1) \| Respond to of 216

Some impressions of Q1(1999) results: The gross margin % in Q1-1999 (21%) is basically the same as for the previous couple of quarters but still significantly lower than a year ago (28%). Similarly, selling/G&A expenses as a % of revenue (25%) have come down slightly when compared to the previous quarters but are still much higher than a year ago (20%). Tells me there is still a lot of work to do to bring gross margin in line and get a better handle on selling and G&A expenses. Also somewhat disconcerting to see the net cash position fall from $30.6 million a year ago to $1.2 million as at Jan. 31/99. This is due mainly to the 3dbm, Inc. acquisition in Q4-1998 (Aug/98) which cost $27.4 million (of which $4.8 million represented net tangible assets and $22.57 million was for goodwill). I think the market is still waiting for more concrete proof that a turnaround is really in the works and also more evidence of the benefit of the 3dbm, Inc. acquisition. I don't see much upward movement in the stock price until these things are more clearly established. Regards. Joe