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Hi Ed,

Here is the latest, Inter-Tel just laid off 15% of the work force as of last week. They have kept it very hush-hush because one of the battle cries of the Inter-Tel sales force was that the company has never had a major lay-off. I know this because I worked at one of the largest branch offices. The lay-offs come just in time to make the annual report look a little more attractive. I only worked for them for about 8 months, but I can tell you that sales are flat, thus the lay-offs. I have seen the monthly reports for the other branch offices and it is the same across the board.

That is not to say that things won't get better. I believe that this is a solid long term stock. The company is 32 years old and has weathered tough times before. They are free of long term debt which is an enormous advantage. If you look at balance sheets from, Nortel, Avaya, and some of the other manufacturers you will see what I mean. I am still buying even though I no longer have access to the stock purchase plan. And will go back to work with them if I have the opportunity.

I think that Avaya, Nortel and Inter-Tel are going to be the big three manufacturers in the future. Fujitsu just announced it has ceased its North American tele-comm operations permanantly. Rumors are floating around that NEC and Toshiba are next.

Inter-Tel has the number one market share in the 40-100 phone market. And is number 2 behind Avaya in the 100-400 phone market. Software release 6.0 will allow a single management point for up to 40,000 phone stations on a seamless network. It doesn't take a rocket scientist to see that they are quietly gunning for Avaya in the larger markets.

This is a very conservative company run by some pretty smart people. I know, I have met some of them. Don't look for any quick gains on this one. Buy if you are looking for a stock that will grow and last, this is the one to buy.

Good luck!
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