ActivIdentity Corporation F1Q08 (Qtr End 12/31/07) Earnings Call Transcript

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2008-02-11 18:29:08.0

Tags: ActivIdentity Corp.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Your first question is from the line of Kevin Wink with Polynouth Capital Management.

Kevin Wink - Polynouth Capital Management

Good afternoon. A couple of questions - the first one is a clarification. When you said that you're looking at GAAP profitability in the second half of the year, are you talking on an operating basis or on a full basis, including the interest income?

Mark Lustig - CFO

That would be including the interest income

Kevin Wink - Polynouth Capital Management

Okay. Even with that objective, you probably still would have roughly another 8% to 10% of expenses as a percentage of revenues to cut out, and so maybe you could give us a little bit more color as to, you know, what are the possible plans to do that?

Mark Lustig - CFO

Well, you know, I don't have the 8% to 10% figure that you have, but we have an internal plan to grow the top line that will accommodate GAAP earnings per share with the revenue base after the completion of the headcount reductions and the expense reduction efforts that we have planed.

Kevin Wink - Polynouth Capital Management

Given the - and we own the stock, too, so we're supportive of what you're doing. We're not trying to ask, you know, inflammatory questions here.

Mark Lustig - CFO

No, not at all.

Kevin Wink - Polynouth Capital Management

Given the range of revenue growth, you know, which is pretty wide - I mean, 10% to 22% for the year - you know, where in that range do you end up with operating profitability for the second half?

Mark Lustig - CFO

Well, I'm not comfortable disclosing where in that range, but I think that the operating expenses line has some flexibility in it as well. If for example we see ourselves hitting the lower end of that range, we'll be more aggressive at the operating expenses line. And if we're going to be at the higher end of that range, we don't need to be as aggressive and we can fund the growth a little more effectively.

Kevin Wink - Polynouth Capital Management

And then just one more follow up on this. If you look at the four expense categories  cost of goods sold, sales and marketing, R&D and G&A - I'm not going to ask for, you know, what percentage cuts, you know, might you be able to do in the different categories, but on a ranking basis, I mean, where are we more likely to see decreases in expenses and where are we less likely to see decreases?

 

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