FOOL PLATE
SPECIAL
An Investment Opinion by
Randy Befumo
Citrix Avoids Squeeze, Signs Deal
When we last left shares of CITRIX SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CTXS)") else Response.Write("(Nasdaq: CTXS)") end if %> on February 27th, things looked pretty grim. The stock had plummeted from $26 1/4 to $10 5/8 in one rather ugly trading session after MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> announced that it would incorporate aspects of Citrix's proprietary WinFrame software into future versions of Windows NT. Concerned that Microsoft would completely obliterate Citrix's business, investors dumped the shares en masse, dismissing Citrix's comments that it might work out a deal with Microsoft to have WinFrame incorporated into Windows NT. These easily dismissed comments have turned out to be quite prophetic today, as Citrix is up $12 to $31 1/4 on news that Microsoft will in fact ship WinFrame with its multi-user Windows NT operating system.
WinFrame is thin-client/server solution to solve enterprise application deployment problems. A thin-client is a low-powered computing device like a network computer (NC) that is managed from a central location called the server. In a thin-client/server network, all applications are managed from the server, not from the actual computer desktop. When WinFrame is added to a network, it functions as an addition to the operating system that allows users in a network environment to run Windows applications no matter what their location on the network, the type of computing device they are using, or how much "bandwidth" is available to them. The reason WinFrame technology was not included in Windows NT originally was because of Microsoft's focus on the independent desktop PC.
With this deal, Citrix gets $75 million in fees and up to $100 million in royalties depending on sales volumes of upcoming versions of Windows NT. For the next two and a half years, Microsoft will endorse WinFrame as the preferred way to provide multi-user access for devices that do not run on the Windows operating system. While Microsoft will incorporate multi-server capacity into future versions of Windows NT, WinFrame will run on this platform. With Citrix having booked $21.5 million in revenues last quarter, the $75 million payment is a pretty substantial sum. Estimates of $0.85 earnings per share (EPS) for the current fiscal year will probably be raised substantially to reflect the fact that this agreement dulls much of the feared havoc the prior Microsoft announcement promised. With $0.26 per share in earnings reported last quarter, seeing this year's estimates raised to around $1.10 and next year's to $1.40 EPS would be possible.
Note: On Monday, May 12, Paul Maritz, group vice president of platform products at Microsoft, and Ed Iacobucci, Citrix chairman and chief technical officer, held a joint media teleconference from 10 a.m. to 11 a.m. EDT. The teleconference can be played back until May 19, 1997 at (800) 475-6701. The playback passcode is 342099.
UPS
Pillsbury, Burger King, and Smirnoff vodka company GRAND MET PLC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GRM)") else Response.Write("(NYSE: GRM)") end if %> gained $4 5/8 to $38 3/4 after agreeing to merge with Johnny Walker, Dewar's and beer maker Guinness PLC.
Diversified electronics and industrial equipment manufacturer DYNAMICS CORP. OF AMERICA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DYA)") else Response.Write("(NYSE: DYA)") end if %> jumped $8 5/8 to $53 on agreeing to merge with electronics manufacturer CTS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CTS)") else Response.Write("(NYSE: CTS)") end if %>, which will begin a $55 per share cash tender offer for Dynamics Corp. CTS will effectively be buying back its own stock, 44% of which Dymanics Corp. owns.
SCANDINAVIAN BROADCASTING SYSTEM <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SBTVF)") else Response.Write("(Nasdaq: SBTVF)") end if %> gained $2 1/2 to $17 3/4 after announcing the appointment of new Co-Chairmen, accomplished broadcasting executive Michael Finkelstein and Ronald J. Doerfler of ABC. WALT DISNEY CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %> owns about 1/5 of SBS.
Information technology department consultants and programmers COMPLETE BUSINESS SOLUTIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CBSL)") else Response.Write("(Nasdaq: CBSL)") end if %> moved up $1 1/4 to $16 3/8 after announcing a $9 million contract extension with Indiana's Statewide Child Support Enforcement System.
LYCOS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LCOS)") else Response.Write("(Nasdaq: LCOS)") end if %> moved up $1 1/2 to $16 3/4 after the Internet search engine company reported that it will announce today a partnership with German content company Bertelsmann.
Information technology consultants and Year 2000 company TSR INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TSRI)") else Response.Write("(Nasdaq: TSRI)") end if %> added $2 to $25 after reporting on Friday Q3 earnings of $0.16 per share on revenues of $13 million, up 63% year-over-year.
Supermarket company SMITHS FOOD & DRUG CENTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SFD)") else Response.Write("(NYSE: SFD)") end if %> gained $2 5/8 to $42 5/8 after announcing a merger agreement with Northwestern retailer FRED MEYER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FMY)") else Response.Write("(NYSE: FMY)") end if %>, which will swap 1.05 of its shares for each Smiths share, valuing Smiths at just under $44 per share as of Friday's close.
TIFFANY & CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TIF)") else Response.Write("(NYSE: TIF)") end if %> gained $2 1/8 to $42 5/8 after Barron's ran an article on the chic retailer in which the company's Chair outlined why things are going so well right now.
DOWNS
INTERNEURON PHARMACEUTICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IPIC)") else Response.Write("(Nasdaq: IPIC)") end if %> fell $1 7/8 to $15 1/8 after the Wall Street Journal ran an article about flattening sales for Redux, the company's flagship drug for obesity.
Fiberoptic cable and networking equipment company TELCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TELC)") else Response.Write("(Nasdaq: TELC)") end if %> slipped $1 1/2 to $10 3/4 after Robinson-Humphrey Co. cut its short-term rating on the company to "market perform" from "buy."
CONFERENCE CALLS
CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %>
Replay available through 5/16
(800) 633-8284 (code: 2624093)
Standard & Poors
On sovereign credit risks in “dollarized” economies
(800) 925-0884
AMERICA ONLINE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %>
(800) 633-8284 (code 2604899)
THE MONEY STORE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MONE)") else Response.Write("(Nasdaq: MONE)") end if %>
(800) 964-4236
INFORMIX <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IFMX)") else Response.Write("(Nasdaq: IFMX)") end if %>
Available until 5/16
(800) 839-8790 -- replay
05/13/97 (Tuesday)
DOLLAR GENERAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DG)") else Response.Write("(NYSE: DG)") end if %>
11:00 a.m. EDT
(402) 220-1032 -- replay available after 1:00 p.m. EDT through 5/16 @ 6:00
PM EDT
05/13/97 (Tuesday)
GENZYME CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GENZ)") else Response.Write("(Nasdaq: GENZ)") end if %>
(regarding contract with Cleveland Clinic to purchase Seprafilm)
(402) 220-6030 -- replay from 3:00 p.m. EDT through 5/20 @ 5:00 p.m. EDT
05/13/97 (Tuesday)
APPLIED MATERIALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMAT)") else Response.Write("(Nasdaq: AMAT)") end if %>
After 7:30 p.m. EDT
(800) 642-1687 (code: 353749) -- replay
05/14/97 (Wednesday)
BELL & HOWELL COMPANY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BHW)") else Response.Write("(NYSE: BHW)") end if %>
Shareholder Meeting Live Webcast
9:00 a.m. EDT
THIS WEEK'S CONFERENCE CALL SYNOPSES
US ROBOTICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USRX)") else Response.Write("(Nasdaq: USRX)") end if %> Q2
Conference
Call
AMERICA ONLINE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> Q3 Conference Call
FOOL PORTFOLIO
STOCKS
FOOL
PORTFOLIO