ADTN CC notes:
Good traction in enterprise and HDSL productions,
good traction in DSLAM's
DSO's 53 days up from 45 days Q-Q
353 mil in cash
Tax rate 32.5
Guidance Q2 and year:
Seeing increased activities across all sectors
Q2: Rev 117 to 120 mil, up 29 percent y-y
GM: 56 to 57 percent
Op Ex 31 to 31 percent
Tax 32.5 percent
EPS: 24 to 26 cents, up 63 to 7 percent y-y
For year:
Rev: 475 to 485 mil, up 20 to 22 percent y-y
GM:
Rev for new markets 17 percent of sales
Rev from traditional markets will see growth of 6 to 8 percent for year, will be lead by HDSL sales
GM for year 56 percent
Op Ex for year 31.5 percent
Income 25.4 percent for year
Tax 32.5 percent for year
EPS $0.97 to $1.00
Seeing macro environment improving.
Q: Who are you gaining share from?
A: Gaining in last 3 years from Diversified line of products.
Legacy area, HDSL - ADCT
New products-DSL- ALA
Q: Will GM fall to 55 percent target sooner than later?
A: Do not see it. We have a significant cost advantage to begin with. Can still be profitable at 25 to 25.5 GM.
Can reduce pricing when it is necessary. Not necessary now.
Q: Momentum in rev? HDSL went down Q-Q. Systems made it up.
RBOC demand. Qwest? Bell South?
A: 2 things going on.In Q always see down tick due to holidays. First two weeks in January always slow orders.
No demand in Q1 for installation of new outside plants due to weather also. Legacy products such as HDSL q-q down as a result. Internal growth of new products offset the seasonality in HDSL.
Q: Qwest caused system category up tick?
A: More than that. Sales of outside DSL to Qwest helped.
Q: If first few weeks of Q were weak so rest of Q was strong, why not higher guidance new Q?
A: Being cautious.
Q: Any remaining undecided carrier opportunities out there?
Timing?
A: Have 6 out of 7 largest carriers in US. Shipping in high volumes to 5 out of 7. Seeing significant increases from customers currently. Seeing traction in other products from those other carriers not currently taking DSLAM's. No idea of timing on decision process. Over year, expect to see by end of year we will be shipping to all 7 out of 7 or 10 out of top 10.
Q: New product contribution in Q compared to Q4?
A: up 7 million in rev q-q, DSLAM lead increase in sales, then optical access, then NetVanatage. Saw increases in
21.2 mill total sales of new products.
Q: percentage of sales DSLAM versus router versus optical MUX?
Q: DSLAM advantages?
A: Can be located near customer. Temperature and environmentally hardened. Can be mounted on a pole instead of pedastal.
Q: DSL above great than 50 percent of new product rev's?
A: Yes.
Q: June Q? Improvement in traditional products? Up tick in new products?
A: Underlying base will improve. Adding new product growth on top.
Q: Any delay in order rev following through in June Q?
A: No.
Q: Linear of sales in Q?
A: March Q usually back up loaded than others. Jan low. march higher. In Q2, month to month pattern is random.
Q: In terms of lead time? 7 days on older products. Delivery time on new products?
A: Sames 7 to 10 days. Except for new introductions.
Q: DSLAM from US or mexico factory?
A: Mainly US and China.
Q: Inventory up q-q. Category?
A: DSLAM.
Q: 10 Percent customers
A: SBC 22.6 percent of sales
VZ 16 percent
Sprint 15 percent
Q: year since enterprise initiative. Adding to portfolio now. Comment on success to date?
A: Normal entry for new product area. Usually takes 1 year to get traction in market. Different from other WAN products in past. Taking longer than usual. Need a full line to meet needs, not just one product.
Q: Percentage of business shipping chasis versus line card additions?
A: No idea. 30 to 35 percent are chasis sales.
Q: Optical access products? How many of carriers taking product?
A: Don't know.
Q: CLEC sales.
A: 15 percent.
Q: y-y comparison.
A: Q4 16 to 17 percent. Don't know y-y.
Q: Increasing contribution from software products. Effect?
A: In general it helps in the GM area. New products usually generate higher GM.
Q: Netavantage line. 5 percent of sales yet?
A: No.
Q: Opti 3 products. How much due to a few customers?
A: No idea.
Q: Extent of new opportunities playing into guidance versus
established contracts?
A: No particular order or customer built into guidance. No large opportunity build into guidance.
Q:How much growth came from DSL scheduled build out versus subscriber growth?
A: No idea.
Q:Intl growth in year?
A: No idea. Putting into place access shelves intl. Moves shelves have few line cards than in US. Still mostly testing installations.
Q: Opportunities in SBC and VZ?
A: No comment on specific customers. Hard to win same type of contract with these carriers at the same time.
Q: From 10K , purchase agreement of 28 mil. Due to outsourcing?
A: Yes, not out of normal. |
