Rashid,
SLNK blew away earnings for Q4 and 1999. I can't believe SLNK has a forward P/E of only 25 and trades at only $12 1/2. Here are some notes from the conference call:
1. 1999 was 57% more than 1998, BUT, more importantly, sequential earnings (i.e. 4Q vs. 3Q) was a full 37% increase, in ONE QUARTER!
2. More reseller agreemnts to be announced soon!
3. Gross margin was 66%, but it is expected with uptick in retail sales that margins will be reduced closer to 60% (what a shame!)
4. Commercial sales were 70% of total 4Q sales.
5. EOY99 cash = $28.5M
6. Share repurchase plan. Total of 1.4M shares repurchased to date BUT only 60,000 in 4Q. An additional amount of 1.1M shares is STILL authorized for repurchase.
7. 500 NEW customers in 99!
8. Nokia and US West were the two largest sales in 4Q but did not exceed 10% in total.
9. 40% of sales in 4Q came from indirectly (i.e. from resellers) and EOY2000 could be as much as 60%. Did I already tell you to expect more new reseller agreements SOON!
10. Siemens reseller revenues were up by 2X in 4Q.
11. International Effort (IMPORTANT) - SLNK will be shown in 8 booths at the Siemens show coming up later this month in Germany. Aren't they the guys who just DOUBLED SLNK sales?? (just wanted to make sure you are paying attention).
12. Gross Margin Pressure - NONE. Competition is actually being reduced. However, with expected increase in retail sales, GM is expected to decline to a lousy 60% :-}
13. NetLink - management was surprised that several "evaluation phase" projects resulted in actual sales in 4Q. Also, they expect that 12 active "evaluation phase" projects will result in sales of $1M/EACH.
14. CIBC, JAnco, H&Q and one other analyst were on CC. IMO, we will see one or more upgrades on SLNK, either as a NEW buy, or raised target price (provided they were listening to what I heard). |
