From the company...
(This message, posted on Yahoo!, is purportedly a message
from the company. I have no reason to believe otherwise.)
Rob
---------------------------
8/22/00 3:22 pm
Msg: 9083 of 9086
Thank you for your note expressing your concern regarding the stock price.
I've had a few of these lately, as you can imagine, and I'm glad that
someone like yourself has his facts straight and is not trying to blame this
on something so ridiculous as our name change. It's refreshing.
Yes, as you know, the industry as a whole is being effected by a shortage of
some components. In fact, you are well aware that this led to us missing
our revenue expectation this past quarter. Despite beating estimates on
income, EPS, margins and sales, as you know if you don't hit on all
cylinders, it's going to cause a drop. In our situation it was a very
reliable supplier who did not come through for us right at the end of the
quarter, causing us to miss expectations.
To address your question, if you were on the earnings conference call, CEO
Sam Smookler outlined 3 steps that we are undertaking to help rectify this
issue:
1. We are adding more suppliers. While we don't have a single source by any
means, we plan to double the number of suppliers under contract. This
exercise does take some time, but the process is moving forward in the right
direction.
2. We've had some internal management changes. The folks previously in
charge of this dynamic who were not to let this happen, or at least keep us
informed, are unfortunately no longer with the company. New talent is in
place to run this operation more smoothly.
3. Obviously, this has the attention of everyone in the organization. Sam
is personally involved in this piece of the business and has his arms around
it to ensure things more forward as per plan.
Now, we are being honest with people and letting them know that this will
not correct itself overnight. We fully expect it to take a couple of
quarters before this situation is no longer termed an issue for us. Demand
for our leading products is great, that's certainly not the issue, as
evidenced by our record orders last quarter. The issue is shipping and
meeting this demand, an issue that's being corrected.
While this clearly not a momentum play stock these days, if you're looking
for something that is expected to playout well over a longer haul, DMC
Stratex has a great story, as the leader in this industry. Unlike with
others in our industry, such as P-Com which was downgraded heavily recently,
the 8 or so out of 11 analysts who follow us and have a strong buy rating
have maintained that rating. Some have even raised expectations. We are
still comfortable with their projection of $400M in revenues for the year,
FY2001, ending next March. As you know, this would be up from $300M this
past year. We are ramping up and dealing with this supplier issue in the
near term, and we expect great things from the company continuing to moving
forward.
Please feel free to call me or contact me if you have any further questions
or concerns. Thank you. Best regards,
Dan Spalding, Corporate Communications Director
DMC Stratex Networks, Inc. (formerly Digital Microwave)
(408) 944-1817 - office
(408) 623-3763 - mobile |
