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Gold/Mining/Energy : SLMSoft.com Inc. -- Ignore unavailable to you. Want to Upgrade?

To: David Michaud who wrote (59)	5/20/1999 12:22:00 PM
From: Cameron	Read Replies (3) \| Respond to of 152

I held some ESP way back when for a short period of time... made a few buck but decided to move on. I thought there were a few interesting comments in the PR accompanying the results though. Interesting enough to take a small position again. The particular comments I found of interest are: >>SLM also adopted a conservative accounting approach as expected for the U.S. market and consistent with its increasing recurring revenue business<< Why are they adopting conservative US accounting methods? A lot of Canadian software firms are acquiring NAS listings because they think they are more fairly valued there. With the increased USA business this would make sense for ESP as well and would probably help them when marketing themselves to potential USA clients!! Pure speculation on my part but I'd be interesting in hearing if there have in fact been any rumours circulating on this or whether other agree that it would make sense. (a)>>This increase in recurring revenue was largely due to the acquisition of Bankline Holdings, Inc., adding transaction processing services revenue of $10.6 million for the period commencing in the fourth quarter of 1998<< and (b) >>Revenues for the year ended December 31, 1998 more than tripled to $36.8 million (1997: $11.8 million)<< and (c) >>SLM believes it will be able to return to its targeted margin levels around 20% in 1999<< These statements would indicate that their base revenue (ex. Bankline) was approx $26 million... up about 120%. Bankline revenue, even assuming no growth would come in at about $40 million over 4 quarter. Even if we take absolutely the most conservative estimate of revenue (ie. no growth of existing business), revenue would be about $66 million. If they get back to 20% margins, I figure that earnings per share would be about $1.00. Apply a reasonable multiple to this for a software company and cha-ching!!! If you do start considering the growth potential associated with USA market penetration... doubling their base business again, increasing Bankline share, etc, etc...!!! Well... good enough arguments for me to jump in. It may take a couple quarters for the earnings growth to be realized and properly valued by the market but I think the return is potentially huge. I'd certainly be interested in hearing the other side of the story however. Comments??