CTMN Q3 2001 CC: Oct 25,2001
6 objectives since down turn:
1) Size the company given the current conditions - have reduce head count from 460 to 198.
2) Control expenses and manage cash - Q3 Op Ex down 27 percent from Q2
3)Sell inventories - slow economy making sell inventory slow process, will take a charge for obsolete product in future
4) Sell new products - Vanatage product on schedule, trials next Q, release mid 2002, 9 trail signed up, 2 ILEC's, 2 IXC's, 5 CLEC trials in Europe + N. Amer., good customer interest
5) Maintain CLEC customers - held on to all accounts, no lost accnts to competition
6) Gain traction in ILEC and IXC - seeing Vanatage giving us traction, VZ was a 10 percent customer in Q, one IXC supply contract signed, one under negotiation, have 2 N. Amer ILEC and 2 IXC contracts total
Financials:
Rev 5.1 mil ver 6.1 mil Q-Q
Tax rate 42 percent
GM 32 percent ver 31 percent Q-Q
4 > 10 percent customer:
VZ - 10 percent
Versatel - 18 percent
MPower - 26 percent
Network Telephone - 16 percent
17 mil charge in Q:
1 mil in stock compensation expenses
16 mil re-structuring charge ( 9 mil non-cash)
Op Ex:
R+D 8 mil ver `0.8 mil Q-Q
S+M 2.8 mil ver 4.5 mil Q-Q
G+A ?? ver 3.2 mil Q-Q
198 employees
81 mil in cash
Burn rate down 34 percent Q-Q
will reduce expenses further going forward
AR 2.9 mil
DSO 52 days up from 26 days Q-Q, due to customers delaying payment till after Q3, had large payments first week of Q4, adjusted 22 days
Inventory 13.4 mil
Guidance:
No Rev guidance
GM flat at 32 percent
Op Ex flat to down 5 percent, 13 mil
R+D 60 to 65 percent of Op Ex
Inventories flat to down 5 percent, 13 mil
Q) Size of Vantange opportunity?
A)Vantage resides in Central Office (CO). Each CO will require a Vantage to manage the edge components. Designed for value added edge services. IXC and ILEC interest high for product.
Q) Competing products? Pricing?
A) No comment on pricing? Expect competing products, but have not seen any yet announced. Some in early stages. In metro it competes against IP SS (Service Switching), in CO not seeing any competing product.
Q) Timing of rev from Vantage? Mid 2002?
A) Requires intense lab and field trials. Vantage vol shipments 2H 2002. Most of current sales Cooper Edge.
Q) What is VZ buying?
A) For their Avenue operation. Not all MTU.
Q) Cash? When will you have to raise more?
A) Hard to say. Depends on rev. Have cash to make it till 2003.
Q) Business, Better Q-Q? Week to week?
A) No visibility. Hard to say. No direct effect from Sept 11. No change in broadband space.
[Harry: Management did not seem to want to to talk. It was a short call and managment cut it short, not the lack of questions. What about tax rate going forward, linearity in Q, new RFP activity, general market conditions for DSL?] |
