I did not take full notes of the call - but I did jot down some notes. Anyone who listened should add on:
-EMC is MTIC's main competitor. Mr. Pearlman continually talked about them during the call. MTI's goal is for a perspective storage client to have MTI and EMC on their final short list of vendors.
-MTI mentioned a new disaster recovery product which is for open systems based on industry standards. Only competitor here is EMC. When asked by analysts when it was that MTI found themselves losing perspective clients, this was the area that MTI identified - disaster recovery of open systems. So, they have introduced a new product in that space to compete directly against EMC. The product is half the price of EMC's and is again based on industry standards.
-Some big wins for MTI valued in the hundreds of thousands of dollars during the quarter included LCI, Iridium, GE, Marathon and Alan Bradley.
-Regarding the inventory situation. Inventories in the US were flat sequentially, which was good considering increased sales. Increased inventories were noted in Europe due to backend logging. MTI felt that this was not abnormal and would return to historical values during the next 90 days.
-Component costs were down as drive costs were down. They would not predict future component costs - which was smart - but they did mention that the manufacturing plant was only at 50% capacity, so they could gain some good economies during periods of higher production/sales - which I would anticipate to happen.
-Tape library sales were up significantly. I would not view this to continue as MTI is structuring a new sales incentive plan to really focus on the server storage business (core competency) as they view the tape business as a secondary. Strategically, they do not want to sell tape as a standalone type package to clients - they want to sell the true magnetic storage devices.
-MTI is positioned well to handle fibre channel business. Mr. Pearlman still believes that SCSI is the strong-hold, and that FC will not be bigger business until the third or fourth q - calendar year. He cited that customers are cautiosly proceeding with FC - much like we thought in earlier posts. But, MTI is postioned well for the market - regardless.
-Everyone was very congratulatory during the call. I noted Needham and Sands Brothers were in the call. There were several other analysts in on the call as well, but I did not catch company names.
Again, I did not take full notes of the call. I would encourage anyone else to add-on to my notes. I was very, very pleased with the report and conference call.
-Jay |
