A look at available data shows the comparison between AVNX and NUFO is grossly unfair. AVNX has one customer over 50% and several over 10%. NUFO's largest customer represents 17%. AVNX has two products and one represents the lion's share of revenues. NUFO has a wide array of products. I don’t have notes from Avanex’s last conference call, so I’ll compare what I can find in their SEC filings with notes from NUFO and their filings:
NUFO Conference Calls notes:
Message 15271696
1) Ramping production:
Execution: We have higher unit output. Full utilization of China facility. Now in 250,000 sq. ft facility --- and accelerating fit-out of second half of facility. JCA increasing several fold this year. Moving from 45,000 sq. ft facility to new 145,000 sq. ft facility this summer.
2) Growing 3X in 2001:
2001 --- confident we will be stronger than before. Revenue growth from diverse product line. Profitable in operating income in 2H/01. Raising guidance from $150M to $240M. 2001 revenues will be 3X 2000. This takes into account positives and negatives.
3) Gross margins improving
We are raising gross margins from an earlier range of 40 - 45% to a new estimate of 43 - 48%. Positive op income in Q3/01. If revenues improve in first half, that could bring profitability into the first half.
4) Actives increasing over passives:
Product mix: 33% actives vs 30% in previous Q; passives 67% vs. 70%. [From Q&A:] Q: Yields in China plant? Actives vs. passives?
A: Circulators in China, yields are similar to U.S. Polarization beam combiners --- very good yields. Actives vs. passives is important question. JCA plus tunables is moving us to a better balance between them.
5) Customer concentration improving. High reliance on CORV and A has dropped:
Customer mix: over 10% customers were Corvis at 17.1% vs. 22.1%, Agilent 15.6% vs. 12.0%, and GLW 10.5% vs. 12.0%. Two more were in high single-digits. [From Q&A:] Q: Customer concentration?
A: Three 10% customers and 2 in high single digits. As far as dominance, we want to bring on more. We see lots of movement. Always looking for multiple design wins in each account.
6) Strong international sales:
Geographical breakdown: 68% domestic vs. 71% in prior Q; and 32% international vs. 29%.
From 10-Q (Oct. Q)
As of October 1, 2000, we had an accumulated
deficit of $49.2 million.
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Now compare to AVNX:
Responses to their Q conference call:
Message 15235185
Message 15232528
From 10-Q:
Two primary products:
The revenues currently recognized are primarily derived from sales of two products, PowerFilter and PowerMux. We commenced shipments of our PowerFilter in April 1999. To date, we have generated the majority of our product revenues from sales of PowerFilter to a limited number of customers. We first shipped PowerMux in April 1999. In the quarter ended December 31, 1999, we began shipping beta test units of our PowerShaper product. In the quarter ended December 31, 2000, we began shipping beta test units of our PowerExpress product. . . .
Limited number of customers:
To date, we have generated a substantial portion of our revenues from a limited number of customers. We have focused our initial sales and marketing efforts primarily on large communications service providers and optical systems manufacturers. Sales to WorldCom (formerly MCI Telecommunications and MCI WORLDCOM, Inc.) accounted for nearly 51% of our total net revenue in the six months ended December 31, 2000 and 88% of net revenue for the comparable period of fiscal 2000. WorldCom accounted for over 90% of net revenue for the year ended June 30, 2000. While we are seeking to diversify our customer base, we anticipate that our operating results for any given period will continue to depend on a small number of customers.
Stock compensation costs [compared to gross revenues of $47.9M]:
Stock compensation expense totaled $12.8 million for the quarter ended December 31, 2000, an increase of $3.2 million over the comparable quarter of fiscal 2000, and were $33.9 million in the six months ended December 31, 2000, an increase of $18.2 million over the comparable period of 1999. From inception through December 31, 2000, we have expensed a total of $69.1 million of stock compensation, leaving an unamortized balance of $57.5 million on our December 31, 2000 unaudited condensed consolidated balance sheet. This increase was partially due to the granting of stock options and stock purchase rights to additional employees and consultants. Additionally, the increase was due to amortization of deferred stock compensation recognized for the intrinsic value of the unvested Avanex options granted to Holographix employees. The deferred stock compensation was recorded upon the closing of the acquisition and is amortized over the remaining vesting period of the unvested options.
Compounded losses:
Despite growing revenue, we have not been profitable for any quarter since October 24, 1997 (inception). As of December 31, 2000, we had an accumulated deficit of $123.4 million.
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NUFO’s last 10-Q hasn’t been filed (I have call in to co. now), so I can’t post the comparable data in terms of losses and stock compensation costs. As soon as I get an answer, I’ll post.
Pat |
