NMSS CC notes
(since looking at sector and companies beaten down the worse)
-Rev 34.0M vs. 25M y2y, 37% increase
-688K net profit or 0.02 vs (0.03) y2y
-38M shares outstanding
- 8M in Net income vs -10.9M y2y
- 62% GM vs. 61% y2y2
- 700K q2q increase
- 49 DSO vs 41days y2y, been in mid 40s for four q
- 6.0 turns
- 209M cash
- Our December results were particularly slow, below our expectation
- conservative supply chain mgt, economy slowdown, and reduced capex
- slowdown will last a couple more quarters
- Our markets are high growth and early for development
- some growth hasn't even started, but will be major telecom investment theme for the next year and decade
- big theme is convergence of voice and data networks in broadband access service or "voice web" and real time computing solutions
- focused on packet based voice networks
- IP telephony is best developed of these, market will be 2B in 2002
- Voice over broadband (DSL, local loop) are getting big, 130% growth in next two years
- Voice Web is access to network content via phone ie mobile commerce, or voice enabled e-commerce, expected to grow to 5B in 2004, we are early in this area
- Enhanced services is another area like conferencing 200M in 2000 will grow to 3.7B in 2004
- Announce Poweracess products - High Density Enabling Solutions for $30 per port. We think half cost of competitors.
- CG6000 is main packet media product
- New customers announcement - Teligent (GSM) and couple Korean companies, some China wireless ISPs, Jetstream, Metaswitch, Yahoo for voice portal space, gemblaster,
- Expanded relationships in CSCO 10%+, ERICY, NT, MOT, Siemens, NEC, ALA,
- 300M of cash available. (Note, worth more in cash)
- We going to focus our company on creating value in the company
- Nearterm visibility is poor.
- Will be flat revfirst half of the year
- Revs may be slighty down 10-15% sequentially
- Hoping for an industry turnaround in mid year
- 10% growth sequentially start after mid year
- 60-61% GM throughout year
- 600 employees should be consistent
- Product development, supply chain infrastructure, and business development are three
- FY2001 is breakeven, FY2002 returns to 50% rev growth rate.
- Will hit 16% operating profit in 2002 and obtain 0.50 EPS
- Cash flow positive so will protect our 300M cash
- Expecting 1.8M in interest income per quarter
- 40M shares outstanding weighted average shares
- remain bullish in the future, products will growth
- remain committed to winning
Q&A
- USWarburg - entering quarter with highest rev quarter on record but guiding down?
A: we saw an increase from start to end in the Q. The majority is positioned for March develiry. Only 30-40 for the quarter. We guarantee a 30 day turnaround. We got orders for all three months. Customers can shink orders or move it out. Not interpreting frnt log has changed.
Q: US PiperJ - where market segment revised down
A: Voice over DSL and wireless local loop market have gotten pushed out some. The most current info is less visibilty from customers in these sector.
Q: UsPiperJ how Policy point product doing
A: In our plan for rev this year second half, a couple announcement for lab qualification in a network. Hopefully license this technology, very early to market. All carriers are enthused and very new stuff in which service offering made
Q: USpiperJ - how improve turns in manufacturing to contract manufacturing model
A: We will be complete in 2001 end. We want turnaround times of 10 days. We will see larger players outsource components and be more demanding in quality.
Q: DBAB - top ten customer?
A: Current Quarter, No 10% customers: ADC communcations, CSCO, Clarent, Commerce network, Net to phone, Clarix, Jetstream , GL Communications, NT, All pushed out orders. NettoPhone only one not to push out orders. Most substantially pushed it out.
Q: Audiocodes competition?
A: No competive losses but have wins.
Q: What level of components in customers, extent of supply chain bottom
A: Guess that it adjusted for supply chain. Most have reduced inventory.
Q: First Analyst Corp - macro economic condition - international vs. domestic
A: Slowdown is globally
Q: SG&A expected to be up 1.5M a quarter sequentially for next two Qs
A: Correct. 2/3 is care and feeding of what's on board and 1/3 product development
Q: Power Access product suppose to supplement?
A: Addresses very high trunking requirement for people building out high density networks, for compute engines using echo cancellation.
Q: DainRW - 10-15% for next two Qs sequentially?
A: Plan for flat revs for next 2 quarters, could be down to 30M for each of the two quarters on the low side.
Q: Then 10%+ next two quarters after that
A: Yes.
Q: Wroteoff I/O inventory
A: Accounting requirement to go for acquisition of I/O company. This inventory was not useful forward so wrote it off. This was written up first in Sep and then wrote off in Dec. Jetstream buying
Q: Wartobem - professional effect?
A: Small part of our revs 5-6%, on it forecast, slowdown has no effect.
Q: Using 10% customer plans
A: No
Q: LU was top ten?
A: Was in top 10, but now in top 25
Q" LatD. IML were supposed to be 3M rev?
A: IML revs came in 2.5M
Q: Voice over DSL suppose to be hot
A: Remain excited for those markets, announce wins with TD soft and Metaswitch. A major customer was impacted by CLEC malaise. Think have industry leading position.
Q: NUAN - Speechworks business?
A: Will see an announcement in space next week. Voice Web is happening, but not enough subscribers in the market yet. Very early day market.
Q: Does 5% cutback by customer like NT hit higher than normal? (Note: connection lost on CC)
Q: Raymond james - breakout revs in four main sectors?
A: Network access 40-45%, network solutions 30-35% best growth, enterprise solution 15%, ip service small
Q: Fidelity - acquitions looking forward?
A: Stock price affect the abilty to make acquisitions. But companies also down.
Q: cash generation fees on banking deal
A: 6M, 169M netted to company
Q: Free cash flow looking forward?
A: yes expect free cash flow?
Q: LatD - How do you protect your self from wild swings in orders ala cyclical company?
A: We are in a high growth market and maybe a cyciclal downturn in telecom spending. We aare seeing a tightening in the finacial markets. If NT reduces 5%, We are impacted by the same amount. We should mirror these companies spending
Q: First Analcorp - EPS guidance for full FY?
A: Will include interest income includes low end of rev range.
52-Week Low on 20-Dec-2000 $5.719
Recent Price $9.813
52-Week High on 31-Aug-2000 $78.625
Market Capitalization $357.4M
Shares Outstanding 36.4M
Float 33.1M
EBITDA (ttm) -$35.6M
Price/Book (mrq) 1.22
Price/Earnings N/A
Price/Sales (ttm) 2.52
Debt/Equity (mrq) 0.61
Total Cash (mrq) $309.2M
Shares Short 1.34M
Percent of Float 4.1%
Jack |
