[More data. . .]
Okay, I've made a few calls and for every question that's answered, I find myself asking two more.
The following comments were compiled from conversations with one of SSPIF's major shareholders and with a DSP specialist at Forward Concepts.
* Hurricane chip --- PCI interface --- the value is in the IP and a number of licenses are likely, any ISP that wants to hook C6X to PC will need it.
* C6X -- won't matter if held up. Co. not depending on products till late 2Q and 3Q. For Q4 and Q1, they have a backlog in other products.
* Loughborough Sound Imaging distribution agreement --- the change from NA exclusive to WW non-exclusive hurts LSI more than SSPIF b/c Spectrum now develops products in direct competition with LSI and is winning in the marketplace.
* IBM --- the OEM agreement has ended. Last year the company had $8 to 9M in revenues and most investors don't realize the numbers this year do not include anything from this source.
* Recent downdraft in stock --- end of 2Q '97 had strong bookings, but late in 3Q two of the deals were pushed out and one was lost. Because of this, 4Q is estimated to be flat. (We're in 4Q now.)
* Current strategy -- ramping size of organization, investing in C6X R&D, and buying back stock. The last time they bought back stock it went from 3 to 14 1/2.
* V.34 products --- based on C6X, this product has very little competition; none as far advanced as theirs. There are estimates that it'll run up to 10 to 12 modems per chip and is being developed for COs and ISPs, not the consumer market. High margins, lucrative market. In beta now, product in '98, cost of developing the technology has been paid in part by NEC, will port tech. to C6X. When Spectrum bought 3L (UK company) they bought multi-tasking technology. USR looking at the technology. All networkers looking at it. They need it! At C6X seminar in Chicago this summer, 5 USR engineers showed up.
* Tax bracket: 40%.
* Barry Jinks --- warm, friendly, smart. Background at LSI Logic/Canada, a visionary, but also a pragmatist, stronger ties to TI than most realize, committed to SSPIF, has long-term horizon for co.
* Overall company --- fundamentally very solid, they do everything first class, financial planning better than many Fortune 500 companies.
I doubled my position today, but wish I'd done it last week.
Cheers!
Pat
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