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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 689.51

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Jan 8 4:00 PM EST

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To: Johnny Canuck who wrote (35877)	1/14/2002 1:05:03 PM
From: Johnny Canuck	Read Replies (1) of 69596

ADTN CC Jan 14,2001 part 2 Tax rate at a higher rate that in Q4. Will effect Op Ex. Do not anticipate increase in head count and salary increases. Will do that will rev increases, but need to see growth again first. Q: Operating leverge in model. EPS 45 to 50 cents. Numbers suggest Op Ex will be up Y-Y 02 vers 01. A: Conservative assumption. Hope to be flat. Increased rev above estimates will see it fall to the bottom line. Q: How much was the effect of the salary reduction? A: 1/2 mil oper month. 5 to 6 mil for year. 6 to 7 percent salary cut approximately. Eliminated all management bonuses also. Not a trivia number. Q: New DLC product. Is that an RBOC or independent teleco? Where will most of rev come from that long term. A: RBOC. ILEC means RBOC. MOney and volume are in RBOC. In the process of starting. Q: Percent of rev from CLEC? A: 16 to 17 percent. Q: Saw some strength in Dec. More detail? A: Normal uptick. Last 3 weeks usually sees an increase. No continuation after the first of January. Across the board for products. Q: When will inventory re-build start for telcos? A: Will not happen till they see an uptick in volume. RBOC`s tend to wait too long to order and then order too much usually. Will need to see uptick in line demand. Q: Op Ex will increase in Q2 02 to 01? A: Hard to get into details. Investing in product developement. Will be consistent as per in R+D. May be up. Tax rate assumes 28 percent for year. Payroll expenses. Q: Tax rate gonig forward? A: Would like ot see it up to 34 percent as it would inidicae we are making lots of money. R+D tax credit will be negilible then. Q: Op Ex. 21 mil for Q1????? A: Maybe a little higher than that. Q: Interest exp up in Q? A: No sure. Other income consistent with prior Q. Q: Competitive landscape? Competitiors? Cost advantage for ADTN? A: WIll not talk about specific companies. We do our own silicon for our products. Our own chip might cost us $3 ver $30 for competitors that are buying from a third party. Stocks below 5 or 10 dollars is not a good sign for competitors. Going through technology cycles, time that you do the best from competitive advanatge is when the cycle is down. Q: Any consolidation industry? A: Most of it has occured. Will look at that potential, but currently don't see any. Most of competition gone. Q: Still staying out of assymetrical? A: Shipping assymetrical, but will stay out of the home. Q: SONET, will gigabit ethernet, native IP put it out of business? Future of SONET give these new technologies. A: SONET has a life and will have major growth. It is technology that is here and here now. It is reliable, can put other technologies over SONET. Will have post SONET era, but expect to be retired by then. See major future for ADTN in SONET. Days of major technology that wipes everything out is gone. Now seeing many technologies that co-exist in the network.

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