Let me address some of your questions:
You wrote:
Est. Ericsson FY 98: $320mm - ~$350mm run-rate revenue when acquired,
deal closed one month into fiscal year so $30mm rev. lost (may be less than $320mm this year as q1 is $30mm light to to slow Ericcson DECT
business in Q2, but assume pick-up in back half).
Response: The projected revenue drop occurred because of a drop in the Krona versus the dollar. This dropped the revenues anticipated, but it also dropped the purchase price substantially to $88M (this has been discussed in my previous posts on this thread). Also the exchange rate could reverse somewhat, who knows? The deal closed just before the end of March; the fiscal year starts on April 1st, so they should get a full year worth of revenues etc. this year. In Marks last letter to shareholders, he said that there have been some revenue delays in Europe though, so hard to know the number.
You wrote:
1)Am I being too harsh on the Global Village haircut? They were a 10% customer last year and are shrinking. How much? Is half going away or all of it?
Response: The Texas plant that FLEXF took a writedown on in the DecQ produced Global Village products. They were a 10% customer in 1996 fiscal year, but in the 97 fiscal year ending in March, I suspect the share was significantly less than 10%. The 97 revenue decline for FLEXF came from this customer and the associated plant. Unfortunately the 10K for 96 isn't out yet. But the drop off in this business ocurred in last year's JunQ.
You wrote:
4)Ascend is meant to be the other large pickup. Flextronics would not comment on what product they are doing, but in a previous post you mentioned it was Max TNT. Any thoughts on potential pickup from Ascend this year?
Response: According to the last Q conference call, FLEXF is the sole supplier of Max TNT. I don't know the projected revenue build-up from this product.
For the other points, I don't have relevant info to add. But one general comment, its very difficult for me to follow and anticipate every new contract. But the expansions in San Jose and Guadalajara is bringing new capacity on-line in markets where existing capacity is virtually "full" at the moment. The expansion of the Chinese campus in Doumen will probably have some spare capacity, but all in all it seems Marks and FLEXF have a plan in place to fill most of this space. If they get even close, they may not blow past $1B in the 98 fiscal year, but they should have a run rate of well past $1B by the DecQ (over $250M a quarter).
Paul |
