GNSS CC Oct 18,2001
[Partial Notes, this call is 80 minutes!!!!]
Sage acq. still pending.
Will not update during Q.
Exceeded raise expections.
31 mil in rev, 70 percent Q-Q. 140 percent Y-Y.
Drive by demand in products in last month. Strongest Q in history in rev and EPS. Increase cash to 57.6 mil.
Backlog greater than Sept backlog.
December Q as good as Sept Q. Rev estimate raise from 25 mil to 36 mil next Q.
Positioned well due to broad product offering in growing consumer market.
Maintain and in some areas expanding share.
Developments in Flat panel LCD:
-in Sept Q price falling tracking decrease in TGP panel prices
-retail $300 price on FP displays down $50 1Q
-consumer represent 30 percent of purchasing power
- 2.5 mil and 2.8 mil shipped in industry in march and june q.
- 4 and 5 mil ship in Sept and Dec Q
- project 14 mil projected shipped in 2001 year
- June Q shipment represent 47.7 percent of all shipped. Less than 50 percent of last Q. Expect next Q to be back above 50 percent
- 70 percent of FP monitor shipped in enterprise and small business
- 14 percent to retail
- 11 percent of home offices
- profile will change in Dec as consumer represent 30 percent of buying power
Design Wins:
-Sharp GM1Z 2 new monitor designs, doing so we as shipments passed 3 mil
-Compaq monitor GM50 controller
-Dell 17 inch win,
-chosing single chip solutions to make images sharp
- 5 new products announced this month, low cost products, highest level of integration
- removed PCB from monitor
-demand for progessive scan TV and DVD strong
Progressive scan LCD TV:
-sample new products early in year
-new version no out with better interlacing targeted at motion imaging
-sampling this Q
Sage Acq will give us widest product line in industry
Increase ability to address high growth markets
Believes as market grow larger companies will enter the market
Sage Acq should be accretive.
Financials:
Sept Q strongest to date.
Record rev, rev growth and EPS
Rev 36.1 mil, projected 25 then revised to 30 mil, so beat revised
Rev up 145 percent Y-Y, 70 percent Q-Q
Request by customers to accelerate order in Sept , continued this month
reduction in prices driving demand
-strong order in take
-backlog now passes level at this stage last Q
-new rev target 36 mil
-seasonal factor make us cautious
-timing of closing of Sage Acq will effect march rev
-GM 46.1 percent, on target
-GM projections for next Q 45 range due to higher vol discount, developing more cost effective versions to improve margins
-Op Ex 9.7 mil due to higher commission due to exceeding rev targets
- project 8.6 to 9 mil in Q, 26.8 vers 36 percent target
-Op Ex 10 percent better than projected ,
- Op Ex project 9 to 10 mil per Q
- Patent lig 1 penny per share
-Operating margin 19.3 percent
- Interest income up due to more cash, offset by interest rate reduction
-tax rate 10 percent
-Cash 57.3 mil
-Increase by 24.5 mil in last 6 months
-DSO 44 days down from 64 q-q and 71 Y-Y
-inventory down to 7.6 from 12.3 mil last Q
-Sept Q benefitted from lower price level of FP LCD s , seeing explosion in demand
-backlog indicates demand sustainable
Q: On panel ramp? percentage of rev
A: started production, no comment on percentage
Q: Pricing pressure?
A: Seeing some. Products have a competitive advantage. Large vol represent vol discounts.
Q: Digital CRT design?
A: Customers have designs, showing at COMDEX
Q: Rev growth, visibility relative to channel. Evidence in stocking?
A: Seeing low inventories with LCD manufacuters and OEMS. No idea on distributors. Since prices are declining, expect low inventories. Seeing low inventories in channel.
Q: 50 to 60 percent of segment. Dominant position in industry?
A: In Japan seeing good demand. Which products will continue? Will continue both products. Environment is still competitive.
Q: Op Ex Projection?
A: No guidance in March Q. Hard to tell due to ramp and closing of Acq.
Q: Trend in orders last few weeks? By geography?
A: Backlog stronger than last Q at same point in Q. Surge in orders in Sept month. Continued. Given fact monitor prices are stablizing, we think this will be a steady state situation. Seasonality driven by consumer demand. Currently only 10 percent of market. Small seasonal effect.
Q: Shift to dual interface in last two Q.
A: Industry grown from 24 to 56 percent ??? Will mirror the market
Q: Excluding Sage. Q1 down due to seasonality?
A: Most demand from business side right now. Expect to grow at market in March Q. Conservative.
Q: Sales direct vers distributor?
A: Most of sales direct. |
