Electronic Contract Manufacture (ECM) Sector Message Board

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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector

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To: Creditman who wrote (880)	11/24/1997 9:49:00 PM
From: rich evans	Read Replies (1) of 2542

I took part in the CCIR conference call today and they confirmed what you have been saying. Business is strong. Pricing per layer is flat but O.K. with an average layer count over 8. Gross Margins for CCIR were down for 1st quarter to around 17.5 but only because of expansion of Pheonix plant and ramping at Austin. Gross margins returning to 19.5. SGA steady at 6%. Interest of 300,00 is <.5% and tax rate of 38% so net margins should hold in the 7.5% Company is looking at 170 mill run rate at end of year so should do 155 mill for whole year at least. They just bought a quickturn flex company as you know and paid a psr of 1. They also want to get into backplane assembly and plan on it after they finish their deals to JV a S.E. Asia plant. HDCO as you know is also into Backplane and equals 11% of their business growing at 15%. So it seems everyone wants into this business which may mean more competition for Sanmina/Altron etc. Growth is continuing however as you have indicated. The Asian Flu is not stopping CCIR's plans. Have you heard anything about PGTZ lately. From what I can see they are growing top line pretty well but unlike CCIR can't seem to realize the bottom line margins of a CCIR or HDCO. CCIR should be 7.5% I think and HDCO should do as well. Anyway CCIRs comments on the industry were favorable and confirmed your info and Pauls consolidation theories. I think the industry as still a long way to go despite the price weakness in some of the stocks. I only wish I had more money. Rich

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