Wind River going up, up, up! Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Wind River going up, up, up!

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Mitchell Jones who wrote (1793)	8/21/1997 5:09:00 PM
From: J. Kerner	of 10309

Q2 CONFERENCE CALL NOTES: The following are some notes I took during the Q2 conference call this morning. I would encourage you to listen for yourself and not trust my notes: - COMMENTS ON THE QUARTER Bookings much higher than sales this quarter. Number of fresh design wins Company's goal of increased quarterly visibility has been met. Company met all internal revenue and profitability goals. Telecom & military were noted as being strong. 70% sales from U.S, 30% Europe, 10% Asia - RECRUITING They are recruiting aggressively. Added 30 engineers this quarter. Total # of employees is 382 vs. 308 last year. Engineering expenses were 17% of revenue last quarter. - I2O Intel to ship i2o chips starting in Q4 and ramping up significantly next year. Every major player will be shipping i2o products by Q1/Q2 next year. Company is still not factoring in i2o royalties and asked analysts to do the same. Company had approx. 50 design wins relating to i2o, mostly adapter cards and motherboards. They expect i2o to be very significant. Mentioned that 95% of the variables are behind us and i2o shipments are a virtual certainty. Intel royalties will be reported to Wind up to 60 days after quarter so there will be a 2-5 month lag between the time that i2o chips ship and Wind recognizes revenue. Company was comfortable with royalty estimates of $1.40 - $1.75 per unit for the Intel deal. DEC deal was higher because they estimated volume would be lower (so DEC deal could be around $2 per unit IMO) - ADOBE Adobe switching out of their proprietary OS into VxWorks for all their products. Significant opportunities in this area. - INTS "PRISM" release Company not worried about upcoming release of PRISM. Customers are not hesitating with their purchasing decisions. It certainly sounded like Wind River Systems is completely dominating and new competing product would not be a factor. - PRICING Company sees no pricing pressures at all for its product on all platforms! - DEBT OFFERING Company felt that this was the best deal for Wind and its shareholders. Demand for convertables was extremely high at 8x1 which allowed company to get favorable terms (convertable price of 48.5 is a 26% premium over closing price the day the deal was done - 5% debt is the low end of its range). Company feels that this deal is less dilutive than an equity offering. Also, bankers were able to pick and choose only the highest qualified investors. Company plans to use funds to invest in technology, partially invest in complimentary companies, and to buy land to facilitate its rapidly expanding workforce. Overall, the conference call was extremely bullish IMO with most analysts congratulating Ron Abelmann for a great quarter. Abelmann also told Dow Jones news that he is "very comfortable" with earnings projections for the rest of the year, EVEN IF THEY ARE RAISED AS A RESULT OF Q2 EARNINGS.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next