REVISITED

Continuing coverage of recent WT stories

P> Telos May Go Public to Ease Debt
Telos Corp., the $200 million Herndon, Va.-based integrator (WT, Jan. 11) that is making a comeback under new management, may make a public offering. Paul Berger, a Washington, D.C.-based private investor who holds preferred shares in the privately held company, believes the company may do that to help pay off debt. In September 1993, Telos worked out its bank problems with what Berger considers expensive financing from equity partners.

Two years ago, Telos tried buying out preferred shareholders for $2 per share. Investors thought Telos stock was worth $10 per share, according to Berger, so they didn't budge. A minority of Telos stock is lightly traded on Wall Street, and it has recently sold for $4.75-$5.25 per share.
A Telos spokeswoman said that although going public is an option, the company has no plans to do so. "The driver for us would be to fund growth and expansion, not to solve debt problems," she explained. She said that a fair market evaluation was performed to make certain that Telos received a good deal on the financing that was done in 1993. She added that regulations on charters and covenants in Maryland -- where Telos is incorporated -- have inhibited the company's ability to pay dividends to investors during the past four years.

Justice Backs Off GTSI Investigation
The Justice Department last month withdrew its investigation into alleged overpricing by Government Technology Services Inc. for its federal customers (WT, June 22, 1995).
The probe targeted the company's disclosure to the General Services Administration of how much it paid for the products it sold on the GSA Schedule since 1988. The investigation centered on whether GTSI, the leading federal reseller in Chantilly, Va., incorporated rebates or commissions when negotiating its schedule sales prices with GSA.
The GTSI review stemmed from an earlier Justice Department probe into the pricing structure used by Novell Inc., Provo, Utah. In August 1994, Novell paid $1.7 million to settle allegations that it failed to provide full disclosure to GSA contract negotiators of its pricing policies and its practice of giving rebates to resellers such as GTSI.

Coherent Improves Sales 32 Percent Over Last Year
Coherent Communications of Leesburg, Va. (WT, Jan. 25) has proven its dominance in the echo cancellation market. The company reported last month its largest quarter to date. Fourth quarter sales reached $12 million, 32 percent greater than the same quarter last year. Net income was reported at $2.3 million, 65 percent more than the previous year, and earnings per share rose to 15 cents, up from 9 cents per share in the fourth quarter of 1995.
Total fiscal 1995 sales were $43.8 million, a 44 percent increase over 1994 sales, while net income almost doubled to $7.6 million from 1994.
Coherent, which specializes in voice enhancement technology for hybrid and acoustic communications, owes much of its success to expansion of its customer base. During 1995, the company added customers such as Telecom Netherlands, KDD, Motorola CableComm, Cray Communications, Geotek, Intel, NEC Australia, Telefonica and Telia.
Coherent plans to gain new business from the personal communications services market in the United States and also from the many international infrastructure projects planned in the Asia Pacific region.

Pentagon Approves MITRE Split
The Pentagon has given MITRE Corp., Bedford, Mass., approval to spin off a commercial subsidiary, despite concern from industry that it will have unfair advantages when competing for Pentagon contracts (WT, Nov. 23, 1995). The approval was informally announced during a press conference by Paul Kaminski, the undersecretary of defense for acquisition and technology. The conference was called to describe how the Pentagon's federally funded research and development centers are being reined in after complaints by industry that the centers are pushing commercial contractors out of defense programs.

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