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Technology Stocks : PRI Automation (PRIA)
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To: Proud_Infidel who wrote (989)9/12/2000 5:41:38 PM
From: Ian@SI  Read Replies (1) of 1214
 
Brian,

Seems as if some of the posters are attempting to get a job as an analyst. One tends to become wealthier by using foresight not hindsight.

Now that PRIA is about 1/4 its 52 week high, focussing on past sins is unlikely to lead to a wise investment choice.

What came out of the conference call?

1. No orders cancelled or pushed out by customers.

2. Backlog continues to grow.

3. Orders continue to come in at near record level. i.e. - about $115M expected for the current quarter, give or take about $10M

4. Guidance for $430M for FY 2001 even though completely flat order rate would yield about $460M.

5. Immediate cessation of taking no margin, highly customized, difficult to manufacture orders. Sounds as if this step alone will increase the bottom line substantially. I got the impression that PRIA may well have been losing money on some of these.

Side benefit: More capacity available for high gross margin orders immediately.

**************
Re some of the FUD in earlier posts.

300 mm has been done differently. Fab managers standardized the equipment up front before building fabs with incompatible toolsets. Manufacturing 300 mm stockers will not have anywhere near the complexity or variations found in the 200mm equivalent.

Problem stemmed from unexpected speed of transition to the turbo stocker displayed at SemiCon West. My guess is that this unexpectedly rapid transition was compounded by an incompetent Operations Manager in charge of the turbo stocker line. [Incompetence may merely be insufficient experience in ramping up production on a new product.]

In any case sounds like the manager is toast; experienced blood has been put in place; action plan was already being executed but didn't produce results fast enough to save the current quarter.

I think that Mitch has done a superb job of presenting the worst case scenario. I also suspect that several managers at PRIA are going to look like heros for their rapid progress in fixing PRIA.

And to the "braintrust" that described PRIA as "DEAD MONEY", Thank you very much. Every time one of you geniuses has declared a stock "dead money", it has substantially outperformed the market, its sector and I've made a ton of money off of their despair. :-)

Ian.
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