dlc and Anatole--Nick Padgett at William Blair and Steve Worobel at Nat West Securities are the only Wall Street analysts I know of that cover PTNX. Padgett, I think, answers dlc's question best in his description of the fifth generation of printers (which have been available now for almost a year) in his January 9, 1996, report:
"Materials cost should decline as the company's new line matrix products all will use a common architecture, including an application-specific integrated circuit (ASIC) and a common controller board. Labor cost (10% of cost of goods, on average) also should continue to fall. The fifth generation of printers will require 15 direct labor hours to build on average. This is down from 22-25 hours for the fourth-generation, 40 hours in the third-generation, and 65 hours in the second-generation, all of which will be phased out over time as volume of the fifth-generation ramps up."
I do not have a relationship with William Blair. The report came as part of the info packet that Printronix sent me. They may have copies of a more recent full report from William Blair. I have seen some one page follow-ups, but no in-depth discussions since the 1/9/96 report.
From what I have seen, the transition to the fifth generation product line seems to be going well. Padgett reported in a 1/8/97 update that gross margins for the Dec. quarter were 60 basis points ahead of his projections and that the fifth generation printers accounted for 96% of the line matrix printers shipped by PTNX in the Dec. quarter. Margins also looked solid in March. Hope this helps.
--David Aegis |
