The Talk with Alliance IR Janine Zanile
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I called Janine yesterday and left a message. She called me back this afternoon. The followings are the topics we chatted.
* DRAM, SRAM Prices - DRAM prices are still weak, but Graphic 256 x 16 chip price is still good. Currently Alliance is still enjoy the good price and good orders for the chip. The overall DRAM prices have started improving. If the trend continues it will help the underline of the business. SRAM prices are stable, and ALSC has relatively good gross margin on SRAMs. Orders are OK. Company is still working on further balance the DRAM, SRAM, G-memory and Flash memory ratio.
* Revenue Outlook - Alliance is expecting a sequential revenue increases in the next couple qtrs. The March qtr target is at $27 - $28 mil.
* March Backlog - it's relatively good. Better than Dec. especially on the new product lines that carry better gross margin.
* USC Contribution - expecting further improvement. Dec. qtr 3.8mil. March could be $4.0mil
* USC IPO - still possible, but no time set.
* Cash Issue - Alliance cash level reduced to $14mil in Dec. qtr. It's enough for the March qtr. If needed more cash, Alliance will consider all sorts of ways to raise cash. I mentioned such ways as selling the USC investment (like S3 did), secondary stock offering, and or borrowing. She didn't exclude any of them.
* Inventory Issue - Lehman thought Alliance will do another inventory reduction in March qtr, but at this point she didn't think so. Since Alliance did 6mil charge in each of the previous two qtrs, I asked if there is a plane to gradually deduct the inventory so that each qtr would not be hurt too much. She said no. She said each time when they deduct the inventory, they were according to the appropriate value at the time, therefore, at this time there is no plan to do March inventory deduction. I asked that if DRAM's price rebounds, is that possible that Alliance will take a credit offsetting the deduction made in Dec. qtr, she said probably not, `cuz most deductions are made on the older products that are now obsolete.
* General comments - Alliance is working hard on two fronts. One is on sales. The new VP and sales dept. are trying everything to explore new markets, both domestically and internationally. The other is on new products development. Alliance is using its excellent design expertise to develop several new products, including embedded graphics memory, fast SDRAMs and others. People's mood is good. Everyone is working hard, and optimistic. The results should improve in the coming qtrs.
As usual, Janine was straight forward. She answered my questions to the best of her knowledge. I promised to call her again at the end of the month. She welcomed.
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