Kevin,
There are actually two SFLX Threads. Hit the "Miscellaneous" Topic, and then hit "IOM" (Iomega). There'll you'll find another active SFLX Thread too with lots of comments (SFLX Makes parts for all IOM Zip Drives- that's how I think it ended up there....).
There is a lot of good analysis there. But a couple of comments, pro and con here. With about five days left in the quarter SEG halted any more shipments from SFLX for parts for 4 and 9 gig drives (upper end network drives- about 1/2 of its business with SFLX). SEG probably makes up about 17% of SFLX's business. Figure that that halved SFLX's business with SEG (i.e. use the same assumption as in the KOMAG situation and SEG- a 50% impact). (Right now 85% of SFLX's revenues come from the DD market; however note that the previous quarter before parts shortages at SFLX's suppliers inhibited non- DD flex circuit growth, only 56.6% of rvenues came from the DD industry).
Next SFLX put out some $$ to upgrade its Monterrey, Mexico Facility too this quarter. So those two events should ding estimated profits (although long-term the good news is that the capital spending/expansion programs should now start winding down). On the upside however SFLX initiated a volume program of parts for mid-range DD's for an unannounced Asian Disk Drive Maker, for the first time.
Secondly SFLX began shipping prototype drives to WDC with its new FCOF technology for flexible circuits- in no way a big dollarmaker now, but helping to establish SFLX as one of the first to commercialize the FCOF technology.
If you go to the other SFLX Thread, then you'll also see the summary of a recent conversation between one Thread Member and Al Castleman, the CEO of SFLX....
So SFLX will be impacted by SEG's problems; but it has steady business with IOM, QNTM, IBM, and WDC, as well as a new Asian Customer too..... Also note that Mr. Castleman stated that SFLX will as of the close of this quarter still be carrying about $4.00/share cash on its books- so SFLX is a cash-rich company too....
Finally if you want a little more perspective, then go to the AFLX Thread and read those notes too- SFLX buys parts from AFLX, so the two stocks are linked to a degree....
Sincerely,
Doug F. |
