Nice to hear from you, Raefon. Did you listen to the conf call?
The conference call lasted almost one hour. Here are some of the key points from my notes:
After Randy Buness, CFO, covered financial stats per the press release, C. Zane Close, CEO said that although Q1 had a very strong middle of the quarter, there have been signs of a slowing -- which they view to be temporary -- in the first weeks of this quarter. "The reduction in unit volume is related primarily to the PC market inventory problems". He said the "slowdown should be no surprise - other press releases from other companies have also indicated a slowdown." And he assured that "We're not getting feedback that this is going to continue past Q2."
Close said: CRPB's market share is 35-40% in the U.S. and 10-12% worldwide. When asked: Is CRPB continuing to gain market share? "Yes, we are." He also mentioned, "We're taking international market share in Europe & Asia. The European market is relatively healthy."
--Sales at Compuroute were on target.
--Sales at SVTR were down primarily because they're getting into the higher margin remanufacturing of probers, and this is the area experiencing a slowdown for Q2. There was also pricing pressure on the low-end refurbishing side.
--"Some of Asian market is a bit off, but not significantly"
--"OEM business has been an exceptionally good part of interface product line. Teradyne and HWP OEM revenues have increased."
--The real trump card [IMO] of the Conf Call seemed to be the acquisition of COBRA PROBE card technology from IBM-Owned Upsys. Close said: "The great thing about Upsys [the acquisition] is that CRPB can continue development of COBRA PROBE card technology on its own." "One of the motivators [to acquire] was to allow us to have more control of the production of COBRA PROBE cards. We can standardize production. Also, Upsys has had limited production capabilities." [I got the impression they were pleased to have those constraints removed.]
"The COBRA PROBE market probably within the next 4 years could take up to 1/3 of the total prober market. COBRA is becoming the FAVORED technology. It is really growing. There is only one additional COBRA CARD manufacturer and..." [I didn't catch that part in my notes, but the gist was that the other company is not very competitive]. "COBRA could have a positive effect by Q4 and a MAJOR impact in 1999."
As Close said in the PR, "Based upon our research, the potential worldwide market for probe cards including Cobra Probe exceeds $450 million per year."
Zane Close Conclusion: "We are pleased with our start for the year. Looking ahead, looks like a soft Q2, but we expect to end the year on a strong note. The ability to get control of COBRA has been a huge plus for us and it will be a key technology for the future."
DISCLAIMER: These quotations are as close as I can reconstruct them from my notes and I believe them to be accurate. Do not make investment decisions based on what you see here. Call the company if in doubt. |
