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Technology Stocks : Silicon Valley Group
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To: Doug Skrypek who wrote (1405)1/20/1998 12:44:00 PM
From: David Aegis  Read Replies (3) of 2946
 
Conf Call notes:

1) 17 Micrascans produced in DecQ. 15 shipped. 2 consumed internally as demo machines. The company is already at a run rate (17 x 4 = 68) well into the consensus Wall St. estimate of 60-70 micrascans to be shipped in FY98. There was no comment about how many more machines would be consumed internally, however.

2) Papken was very upbeat about near term prospects as manufacturers gravitate to .25 micron. Current backlog of Micrascans include 47 to ship within the next 12 months and 27 to ship beyond a 12 month window (therefore outside of the 12 month window by which backlog is reported). Therefore, production will outstrip orders in hand. Papken said turns orders should be strong and that he is absolutely not nervous about whether orders will be there when the machines are built. He said the concern is whether SVGL can ramp production capacity.

3) Papken says that SVGL is still on target to be at a 200 Micrascan per year run rate starting with the first quarter of fiscal 1999. No Wall Street analyst I've talked to believes this. Potential for positive surprise?

4) Competition in Track and Thermco remains fierce. The company is attempting to add Track to the Micrascans in the form of a "cluster tool." Hence the internal consumption of Micrascans. This topic was not really discussed on the conference call, however.

5) The company only has about 2% of its backlog in Asia. The Dong Bu order was taken out of backlog. While it was not a cancellation, it is now in the > 12 month shipment category.

Overall impression. Papken was very upbeat. Russ Weinstock was cautiously optimistic. The analysts on the call still seemed a bit skeptical.

--David
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