Don't ask Fenton about annual shareholders meeting. But here is a copy of a post from the AOL board.
Subject: meeting
Date: Thu, Jan 22, 1998 18:11 EST
From: DavidN2104
Message-id: <19980122231100.SAA13344@ladder01.news.aol.com>
Shareholders meeting was good! Good news. I took a few notes in case anyone is interested. I'm sure there will be others posting notes also, so lets compare.
First off, MrSansone says there is more demand than supply in the ecm sector. He expects JBIL to grow at 25%. The two reasons for this are #1. Continued outsourcing from the oem's #2. More and more JBIL is being asked to make COMPLETED products.
Some other points made were- JBIL builds products in the countries or areas where they are consumed. American products are made in america,,,asain products made in malaysia,,and so on. Also, design engineering sets JBIL apart from the other ECMs. And design engineering reduces production costs for JBIL.
MrSansone talked about "work cells" and how grouping certain products under one managment team helps keep things running smoothly. The same products may be made in other plants but the managment team is the same.
He went on to tell about how many customers JBIL has now,,,<12> and how many products are made for each customer<45> and how this compares to years past. He also mentioned that for greatest effciency,,,one customer and one product would be great,,but that would'nt be possible and would be risky. having more customers would be less risky<more than 12> but that it reduces effciency. Therefore,,,the right mix of products and customer base is an
important point. They dont want to be too spread out,,,yet dont want to risk having only a few customers.
Later he mentioned that JBIL is moving away from PCs and is more into consumer goods and periphials. Mentioned whirlpool dishwashers and others. He also mentioned Gateway however! And he said right now the computer and perphials side is 49% and the comunications side is 51% of their business.He stated that some products are ordered,,,built and shipped DIRECTLY to the end user! The customer never touches the products. I would suppose this is the
case with Gateway2000.
Building manufacturing size----Florida-216,000ft
Scotland-130,000
Mexico-150,000
Malaysia-150,000
He stated these figures are double from last year. And that the Mexico plant would bring a dramatic impovment in the next 12 months. He said later that it would be the third quarter before the mexico really plant kicks in.
The company has 43 million in cash and does look for potential takeover areas. He said there are many smaller less efficient companys in the ECM sector. He said they have been looking for three years. He says JBIL has a high return on equity compared to others ECMs.
Asked about the asian flu---Sansone replied that it affects us two ways #1. Reduces the demand for products in those areas. #2. Lower wages improves profits from Malasia. He stated that product sales to asia are about 6% of JBILs sales,,and that if that were reduced in half to 3%, it just would have much if any impact at all.
He was asked some more questions about 3COM,,US Robotics,,,cable modems, conveter boxes. He mentioned that the telephone industry was very slow and that JBIL is not involved in this area,,,that JBIL is only involved with data comunications.
Asked about the WANT ADs and parking lot fullness---MrSansone says that the
Florida and Mich plants are very strong now,,it takes lots of people power,and that in the future,,,more automation may come into play,,that he'd like to see the Fla and Mich plants become more of a design and managment area and less in manufacturing. He says that they do talk with people at Techdata, however some sort of merger or sharing of customers is'nt in the works .
Ok,,,,here's the good part haha! He says that last year<summer>,,,he warned of a slow down to the 30% growth range,,,and that the warning was unheeded buy some large institutional investors. They bid the stock up into the $70 price and when the earnings report came in Dec,,,they pulled the plug. He says that there is about 20 million shares out there that are'nt owned by employees<or others directly in the company> ,,,and that of those 20
million,,,,about half those shares were in the hands of these large instituional momentum types. Thats why there was a sudden price drop.About 5 million shares were sold in the last few months. He says that those 5 million shares<roughly> are gradualy being bought and that when the slack is gone the stock price will move up. He thinks a fair price now is in the $50 range. He said JBIL,,,being more effficient should have a PE number 3 to 5 points over
the other competiors. and that the current PE should be about 25-26
Thast about all I got,,,. I have one question,,,who rode the red harley to the meeting.? I know it was one of you guys!
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