Conference call notes:
CFO’s remarks:
They will usually report numbers before non-cash & non-recurring items.
3q00 sales were up 26% sequentially. Fiberoptics up 29% sequentially, wireless 31%, semis up 13%.
Guidance:
WJCI gets 12 month rolling forecasts on a weekly basis from their larger customers (NT & LU).
WJCI uses conservative numbers based on estimates below those rolling forecasts provided by the largest customers.
During the 4thq00 they’ll begin selling fiberoptic components on consignment basis to Nortel. They expect total revs for the Q at $36-37M.
For 2001 they expect $167-172M. 1q01 should be flat with 4q00. For the remaining Q’s they expect 10-12% sequential growth.
Gross margins should stay the same as 3q. They should expand above 38% in 2ndH01.
R&D will increase to 14.5% in 4q & beyond. SG&A will be 13-13.5% over the next 2 Q’s, and declining to 12% by the end of 2001.
Operating margins will increase to over 9% next 2 Q’s; new target is 11-12%, to be reached by the end of 2001.
Tax rate will be 33% in 4q00, but moving to 40% in 2001.
EPS will be .04 in 4q. .18-.20 for 2001.
Debt free. $73M cash & equiv.
CEO’s remarks:
Fiberoptics are driven by Nortel’s increasing demand. Currently expanding mfg capacity.
Lucent is their main wireless customer. Marconi is new. New products for Cisco. Only a small portion of their current revenue is from fixed wireless.
WJCI is attempting to diversify their customer base to smooth their revenue stream.
Q&A:
Ed Snyder, Chase H&Q: Any slowdown in orders from Nortel? No
How will the consignment model work? No change except that WJCI will own the inventory at their facility. It’ll take 1-2 weeks, and has been included in the guidance for 4q00.
When does the new product begin to ship for CSCO? Low rate currently.
Analyst from Thomas Weisel Partners: Update on the optical side? Working with a number of customers on next generation products. Production next year.
Dale Brown, CIBC: Split of the wireless business (PCS/cellular vs. fixed)? Currently, almost all is PCS/cellular. Being conservative for fixed; projections will change as they go forward and receive orders (implied that forecasts will increase).
Competitive position in semis? Strong acceptance of their products from all the major bay station players. 3G deployment in 2001.
Fiberoptic demand affecting trends? Fiberoptics and semis are above their average margins, wireless is below.
What percentage of your revenue forecast is from these rolling 12-month forecasts from customers? In excess of 80%. They are multi-year agreements.
Kevin, Wells Fargo: Cisco and Marconi are fixed wireless customers. Any others? Not yet.
Any other products for Cisco? No.
Eli, Archer Capital Partners: Customers in each segment? Nortel is 46% of sales, Lucent is 27%. Fiberoptic is almost all Nortel, with a little for ADCT. Lucent is by far the largest on the wireless side. CSCO and Marconi will also be large customers in wireless (fixed).
Ericsson, Nortel, and distributors are large customers of semis (none over 10%).
Would not give backlog or book-to-bill information. Referred back to the guidance provided as an indication of backlog. |
