Not sure if this has ben posted....ELNT named best managed semiconductor company under $1 Billion (in annual revenue I assume) by Electronic Buyers News.
ebns.com
Leaving competitors at the starting gate, Milpitas, Calif.-based Elantec Semiconductor Inc. has rounded the first turn on the technology track and is kicking up a dust cloud visible all the way to Wall Street.
Elantec's proprietary, high-performance analog ICs for next-generation consumer products are proving to be pretty fast steeds in the optical-storage, video, communications, and power-management fields.
The gross margin for the nine
months ended June 30 reached 61.2% and operating margin 28.2%-lofty percentages for a semiconductor supplier.
With about 300 employees and a small bipolar fab in Milpitas, Elantec has been around since 1983. But its stock price has taken off in the past year, from about $6 a share to more than $100 a share at the end of September, and the chip vendor's sales are expected to jump from fiscal 1999's $50.7 million to nearly $100 million in fiscal 2000.
“The prospects for the company are just enormously exciting,” said Richard Beyer, who became president and chief executive in July. “The company has really positioned itself in some of the fastest-growing markets that exist today.”
Virtually all drive manufacturers use Elantec products, said Ralph Granchelli, vice president of marketing.
Elantec makes amplifiers, buffers, comparators, and drivers, and has developed numerous application-specific products such as laser-diode driv-ers for CD and DVD rewrite drives in PCs, buffers for flat-panel LCD monitors, and HDTV screens and line drivers for DSL systems. The company recently introduced DC/DC converters for handheld devices, PDAs, Internet appliances, wireless test equipment, and camcorders.
Elantec has set a blazing pace, said analyst Eric Ross of Thomas Weisel Partners LLC, San Francisco. He expects fourth-quarter earnings, due out this month, to be 27 cents a share, vs. 24 cents in the third quarter and 8 cents in last year's fourth quarter.
Fiscal 2000 earnings should be about 78 cents a share, up from 21 cents the previous year. Results for the year ended Sept. 30 will be announced this month.
Elantec's strategy has positioned the company far ahead of competitors in products that are not yet on the street, such as DVD rewrite drives and flat-panel monitors. New products for the power-management market will contribute significantly to the company's growth in 2001, he said.
Strong video and optical-storage product demand in Asia increased Elantec's international business to 76% of total revenue during the third quarter of fiscal 2000, up from 56% in the same quarter of 1999.
Elantec will be “virtually untouched” by the flatter PC shipments some analysts expect over the next year, because the company is tied to future technology, and the transition from older technology to new technology is happening so rapidly, Beyer said.
Analysts estimate 175 million PCs will be shipped in 2002, he said, and Elantec expects 100% will have CD read-write as opposed to read-only drives. “On top of that, we anticipate in the second half of 2001 DVD rewrite drives will start to become a part of the PC landscape,” Beyer said.
Due to their higher capacity, DVD rewrite optical drivers are the next logical step in Internet-connected PC developments to enable downloads of streaming video and soundtracks, Granchelli said.
A CD-RW provides about the same amount of storage capacity as a CD-ROM-about 0.635 Gbytes-and can record software and music from online sites. But a DVD-RW can store as much as 4.38 Gbytes, or seven times more video data, on a single-layer disk.
HDTV will accelerate the company's growth, spurring the advancement of video digital recorders and DVD-RAM-based camcorders, Granchelli said. “So all these platforms tie together in a very synergistic way in that you can take movies with your DVD camcorder, put it on your PC workstation, and digitally edit the video content. Then you can play it back on your video digital recorder to your HDTV,” he said.
The market for CD recordable drives is on a huge growth ramp, and both DSL and flat-panel displays will be big markets in the next few years, said analyst Mark Grossman of SG Cowen Securities Corp., Boston.
High-performance analog will be increasingly important in networked communications and consumer electronics that require higher bandwidth, Thomas Weisel Partners' Ross said. “Elantec ends up being in end markets that are going to grow extremely fast, compared with the rest of the market,” he said. “Plus, they have a value-added piece that's very difficult to design out in those end markets.”
Elantec is likely to maintain its healthy margins because it focuses on high-performance analog products and dominates the markets it serves, Ross said.
Despite volatility in the stock market, the company fared well in its recent secondary public offering. “Elantec's focus away from the PC industry and away from the cell-phone industry was a benefit for them, ... and investors realize this,” Ross said.
The more than $130 million raised in the offering is not committed, but will be available for working capital, improvements in the company's fab and engineering facilities, and possible acquisitions of other companies or product lines. Company executives did not elaborate. -Bill White |
