Bob, you are correct, there is no replay of the call. My notes from the call include the following:
..Papken stated that every SVGI division was well positioned to benefit from continued demand for semi equipment.
..SVGL in particular appears to be well positioned vis-a-vis the competition. SVGI is making a heavy investment in the Lithography division. They are putting in a second manufacturing building, and plan to invest $70 million in cap ex in this area in fiscal 1998.
..SVGL is on track to be at a 200 machine per year run rate by this time next year. (IMHO they will probably experience some start-up difficulties, but I'm in this stock for the long term and the long term looks very good).
..The production issues with the Track divisions 200 APS machine are now largely resolved, and some 200 APS's will go into production this quarter. Some bugs are still anticipated as production begins to ramp.
..Papken said that it was too early to tell what changes might occur in the buying patterns of SE Asian countries, but he felt that Taiwan and Korea would remain solid. He pointed out that when Japan reduced its investment in manufacturing capacity due to stock market turmoil in the early '90's that other SE Asian countries came in to fill the void. My inference from this was that if some countries cut back as a result of the current turmoil, that others might come in to fill the void again today.
I have three pages of notes, but these were the highlights. Most Wall Street analysts on the call sounded positive on the EPS and Korean order press releases. A couple of analysts tried to push Russ Weinstock for confirmation of the First Call estimate or to give more detailed guidance on revenue and margin projections. In my experience with SVGI, they never provide such guidance. This is the first call that I have been on in which analysts were pushing for guidance. Those two analysts might be reluctant to recommend the stock since they seem caught up in near term earnings issues. Also, when asked about the competitive positioning of the Track division, Weinstock was somewhat less than upbeat. These were the only two negatives that I noted on the call.
I personally think that FY1999's earnings are more important than 1998's. I expect ramp-up and volume issues will impact 1998 earnings. Orders and customer acceptance of Micrascans, 8000 AVP's and 200 APS's are much more important to my evaluation of 1998. In that regard, the competitive order win with a Korean DRAM manufacturer that is a new customer for SVGI is, IMHO, extremely favorable.
--David |
