Marks said they plan to beat the 30% annual growth expected.
He apparently feels they can grow 40% annually just by building out capacity at existing sites. Of course, he said they also would look at "opportunistic acquisitions".
When I 'pegged' him by saying that some who follow the company felt they were growing revenues but not growing return to the shareholders, he said:
"Well, for the last five years we have grown earnings at 70% per year." And he looked me right in the eye defiantly.
Several times he said "...the analysts expect us to grow 30% a year, but we expect to do much better than that."
If the sector does grow 25-27% a year, I think 40% a year is not unreasonable at all for the guys in the $1-2B revenue range today (JBIL, FLEXF, SANM, DIIG). The big guys are expected to get the bulk of the growth opportunities. When I first looked at this sector, $50M annually was a big contract, now we are seeing $100-300M contracts, and I'm hearing rumors of even larger contracts/deals out there. The recent NCR deal by Solectron was over $700M ( I've even heard 1B to 1.2B ). The small players can't do these kind of deals.
Remember, even if FLEXF grew 40% a year for five years, and did $10B a year, they would still only have about 4% of the projected world market for ECM at that time. This is assuming the growth rate of the ECM sector is 25% a year. I think Marks is planning to have more than a 4% market share in five years.
Paul |
