FTE Networks Inc (fka FTNW)

[Ed Ajootian]

zoomlik, it was great to see them put something out even though the numbers are still not final. By now you would think that the numbers should be pretty far along to being something you can rely on.

My hunch about margins going down is as follows:

1) I believe part of Benchmark's business is that they can act as general contractor. That activity has very low margins I believe. Maybe a higher mix of Benchmark's business this quarter was from acting as general contractor.

2) I suspect that the auditors may have found some expenses that were not being accrued for but should have been, and that has dragged down the margins. Margins were down pretty significantly in 4Q last year also, and I believe that was also due to unrecorded accrued expenses being identified by the auditors.

3) I believe the first contract for CrossLayer was done in this quarter. It would not be a big surprise if they had to accept razor thin margins to get that contract, just to get the first one under their belt.