Zacks shows $.51, First Call $.50. don't know from where $.52 comes.
Conference call notes:
- NTime is ramping up "nicely" in Japan as Japan has embraced NT operating system moreso that the US. But as US comes aboard NT, a greater number of sales will be generated from NTime applicataions here as well
- Major competitor of Ntime application in the US is "Vetcher Com" out of Cambridge Mass. RSYS application however is superior in that Vetcher's software/hardware solution is on the same memory space which exposes NT to operating bugs and the potential of a system crash. Myers states that RSYS software engineers have developed a "proprietary" solution which avoids this problem. RSYS just discovered Vetcher's crash scenario, so this could help in additional future sales as RSYS has a competitive advantage here
- Europe consisted of 25% of revenue; they've hired a VP of sales in Europe and are concentrating on the telecommunications industry there and see many possibilities there
- Europe's portion of business is seen as continuing to grow
- design wins are ramping back up to normal in the first quarter of this year relative to their internal goals
- gaming industry design win was a "substantive win" and may lead to other wins in the gaming business
- Entrance of Motorla into Intel based catalogue product designs does not compete head-on with RSYS as Motorola's applications are limited. Myers stated that RSYS currently has an advantage over Motorola because of RSYS majors in customer based specific products
- revenue increase from $31 to $36 million from 3rd qt to 4th qt was in part due to a "one-time" infusion of the gaming product win. revenue in the 1st quarter, as a result will be flat relative to the 4th quarter, but an increase over 1997's first qurter's revenue
- only one customer had the honor of being approximately 10% of revenue
- "very excited" with growth prospects of the DSP based solutions - especially in Europe where these products are already being tested
- added several modules during the quarter and increased production capacity for expected increase in production throughout 1998
- haven't seen any affect from Asian markets other than the postponing of decisions relative to designs in the 4th quarter which have now resumed to normal
- gross margins in the 1st quarter will remain in the 37% to 39% range
- they've narrowed sales outstanding from 75 days to 70 days and believe they can work that model to 60 days outstanding
- inventory increased, but in absolute terms over 1996, it decreased 10%
- backlog of $38 million is their largest backlog in there history
- four main clients were Cabletron, Harris Semi, Nortel, and now this gaming company which they couldn't name because the gaming company hadn't announced their relationship with RSYS - but they stated it is a very well known gaming company
wrote this all down for Burt who would be asking. have no idea where the price will drift. but assumption is that as RSYS contines to advance their Ntime product, price of RSYS should drift upward. must remember that RSYS won a design win six months ago which, according to them "will be the largest design win in our history in terms of revenue". revenue from this win is expected to begin moving to the bottom line in the second half of 1998
Frankly, I believe that analysts had set the revenue and earnings goals of RSYS higher than what RSYS own internal goals were for this quarter and that these same analysts who projected high did not expect RSYS to meet their goals and had aggressively shorted the stock. Wonder of wonders, RSYS exceeds their earnings and revenue goals for this quarter. The first quarter has always traditionally shown less growth than the 4th quarter for the embedded industry, so we'll se where the analysts set their goals this time around. I'll be watching. |
