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Technology Stocks : Westell WSTL
WSTL 6.130+8.7%Nov 26 3:52 PM EST
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To: Rich Wolf who wrote (20941)10/20/2000 12:40:46 AM
From: I. N. Vester  Read Replies (1) of 21342
 
Rich i spoke to wstl IR guy, Bruce Albelda. i chewed him
out really good about the call. he took my remarks with
grace and gave me as much time as i needed to answer all
the specific questions i had.

i told him all we've heard indicates sbc is ramping up
installs this quarter why is your cpe reduced? he confirmed
a figure of about 30M for cpe this Q(all the Q-to-Q decrease
comes from cpe, looks like), but he swore up and down that
they are not and have not been losing market share to their
cpe customers.

he said have to prove themselves everyday to their 1000 lb
gorilla customers, and have gotten in hot water recently
for discussing with 3rd parties what these customers
have told them. but basically he confirmed that all
of their forcasts past and future are very directly based
on the numbers the customers give them.

it sounds like the story of massive inventory buildup at
sbc - enough to last into the current Q - may have been
quite accurate.

On the other hand he said that they have got a large prod
capacity build up for them by solectron in malaysia and
one reason for the inventory buildup was looking ahead to
the expected pickup in demand in 1Q cal 2001 and beyond,
if they drastically cut down their orders from solectron
now, it could be really hard to get the capacity back from
solectron when they need to turn the spikot on again for
sbc et al. also mentioned that they felt they need to take
advantage of the availability of parts - some are single
supplier and will get scarce and expensive again when the
dsl buildout train get back a head of steam.

re financing, he reassured me that when the bankers come and
see their operations there is no shortage of funds available
and reasonable rates, whether in straight debt or
convertable or whatever. <<JUST PLEASE DON'T GO BACK TO
CASTLE CREEK, EH>>.

on a trading basis i wish i had sold today at 6.5 or better,
but i did come away feeling much better about the outlook
and that the situation with the terrible forcasting and
very jerky start and stop of the cpe business is not of
wstl's making.
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