HAD TO POST THIS: FROM LEXAR CONFERENCE CALL
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--" Sales to Kodak, which had been one of Lexar's top three OEM
customers, were significantly reduced in the fourth quarter. Sales to
Kodak have been primarily privately labeled lower-end consumer products
bundled with cameras.
-- Shipments to Olympus Japan, which are expected to be insignificant in
the fourth quarter, had been anticipated to be $9 million for the
quarter and had been an aggregate of approximately $12 million in the
previous two quarters. Management noted that it was hopeful that
shipments to Olympus Japan would pick up in the first quarter and that
data showed an increase in Lexar's retail market share for
CompactFlash in Japan to approximately 14%.
-- Management noted that there was increased competition with new market
entrants and that there had been pricing reductions by Lexar's major
competitor SanDisk, resulting in Lexar also instituting price
protection which would adversely affect fourth quarter margins as well
as its outlook. Lexar also noted that rebate programs in place would
also impact revenues and adversely affect margins.
-- Management indicated that the Company hoped to achieve profitability
during the next year in part by reducing its private label OEM business
and seeking more controller sales and licensing revenue, noting that
initial discussions with potential customers had been encouraging. In
addition the Company stated it would be reducing expenditures by
slowing hiring plans and postponing facility relocations.
-- The Company confirmed that it had made its net payment of $6 million to
SanDisk in connection with the settlement of the SanDisk litigation and
that its new non-infringing controller had commenced shipping in
mid-December. Management stated it anticipated that most of its
current inventory which would be subject to SanDisk settlement and
possible royalty payments if it were sold domestically after
March 31, 2001, was expected to be sold by that time or intended for
international markets.
-- The Company stated that its current cash position was approximately
$32 million and inventory levels were anticipated to be approximately
$26 to $28 million at the end of the fourth quarter. The Company's
debt facility had been drawn down to approximately $10.1 million at the
beginning of the third quarter. The Company believed it had sufficient
capital or access to capital during the next fiscal year.
-- The Company noted that during the fourth quarter it expanded sales to
Dixon's in Europe and added several new accounts including Moto Photo,
Inc. and Service Merchandise and that sales to new accounts were
anticipated to be accounted for on a sales through basis.
-- The Company indicated that results for the first quarter 2001 were
still too early to predict, but that it was hopeful the quarter's sales
would be comparable to, or a slight decline from, those in the fourth
quarter, depending upon consumer buying habits of digital film in
response to holiday purchases of new digital cameras.
-- Flash memory pricing was noted to be declining; however its impact on
the Company's fourth quarter margin was still being determined,
considering the Company's current inventory levels and overall pricing
pressures on the Company's products."
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R.(SI-LEXR/NEWS) |
