This is from a poster on the Yahoo board which I think covers it very well. I listened to part of the call but got called out. I plan to listen to the replay.
FSS:
1. Confirmed that the reduction in rental rates is about 10%.
2. 2003 operations depends on the economic turnaround (when and how strong), but the assumption is that it will be flat with 2002 (which is very conservative).
3. The sale “funnel” is now “strong” and arises from existing communication needs (not anticipating broadband soon).
4. I had the impression that FSS was just fine, with there being little concern about it.
SSL:
1. Expect 7 orders in 2003 (including the 2 previously expected in 2002 and 5 in 2003), based on specific customers discussing specific needs with LOR (customers delaying orders to as to decide the actual configuration they will need at the very last moment). It all sounded very real to me. The 7 was not a share of market estimate. Many more than 7 customer discussions are taking place.
2. The factory can operate fine even if there are no orders in 2003 (and even early 2004).
3. There is no “merger” discussion (of the whole company), which is great with me. But there is much joint venture and co-operation discussion. Where I previously felt SSL was a problem and required a consolidation, I am now much more optimistic about it. Looks like LOR can survive on a stand-alone while others combine and reduce capacity.
Cash flow:
1. Cash of $100 million (or more) at 12/31/02, and between $100 and $150 million at 12/31/03 after all capex requirements.
2. The cash flows seem very solid, and the talk was extremely positive -- don’t think there are any problems in this regard, all the 2003 estimates seeming to be very conservative and yet projecting lots of cash.
Corporate:
1. There is no doubt in my mind that (as I previously speculated) LOR will do some sort of refinancing of the outstanding public debt presently selling at about 40 cents on the dollar.
2. Reducing debt remains the primary management objective, and it is obvious something is going to be offered soon.
3. LOR will do what is necessary to avoid delisting, even do a reverse split if that is necessary. I read the discussion as being tongue-in-check, LOR having to recognize that a RS is possible (how could you legally say otherwise), but that Bernie has the avoidance of a reverse split in the bag. If I had to guess, the debt recapitalization offer will send the price over $1.
4. Apparently, a behind the scene effort is being made by others (LU?), and unknown to LOR, in Washington to get a moratorium on delistings due only to stock prices under a $1. It could be something appropriate for an economic rejuvenation agenda since there are so many companies in that category. I suspect that LOR wasn’t up on this effort because it really feels that it has the delisting beat (by the recap).
All-in-all, I found the cc to be quite upbeat, and Bernie did not put his foot in his mouth.
LUX |
