Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 201.08

+2.6%

Nov 11 3:59 PM EST

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To: Dennis R. Duke who wrote (43452)	4/9/1998 7:47:00 PM
From: Dennis R. Duke	Read Replies (3) of 61433

Michael Ashby at the Q1 CC: Let me give you the details of the Q1 revenues. $305m or 4.3% over the prior Q with the following breakdown: Sales in Growth rate Q1 Over Q4 Access Concentrators 44.2% 8.7 or 7.8% (its one of those) Core Switching 41.1% 1.1% (see GX550 not here!!!) Enterprise 9.9% 7.6% Services 4.8% -4.?% North American Sales 74.2% You can test your math skills International Sales 25.3% 0.8% Access Concentrators Ascend was on PLAN with NO SURPRISES and that was GOOD NEWS. ISP demand was strong accross the board. As PLANNED MAX6000 sales were a small amount of the Q1 revenues. Core Switching Strong demand with momentum increasing for the GX550. Some of the GX550 are shipped, but no sales have been recognized. GRF down slightly in the quarter, with broadband (Shara, etc.) products up in the quarter. Asia Pacific expected to be stronger in the 2nd half of the year. Japan's results were improved by one customer contract. Gross Margin At 64% of sales gross margin was the same as the prior quarter. That was better than expected due to price effects. (Apparently the market did not require the lower cost per port that was discussed back in October/November. And the company had taken steps to improve cost of sales buying that was mentioned in the Monty and BARS conferences.) R&D At 13.4% it was slightly less than planned due to late hiring. The people have been hired and the expenditure will grow next quarter. An India facility was also brought up this quarter. Sales and Marketing At 22.1% of sales it was down from 22.8% of sale sin the prior quarter which is according to our PLAN to reduce these costs. (I think the goal was 20%, and expected to be in that range by year end, according to PLAN). General and Admin 3.3% and expecting to bring it down to 3.0% of sales by year-end. Operating Income is the Best of Class in the category. (I guess he was trying to say that ASND is the most profitable in the NWX sector). .26 cents versus last quarter of .24 cents and 1 cent above the First Call estimate. Balance Sheet and other items Cash is up from $571 to $671 mainly due to operations and the exercise of stock options. DSO at 72 days, same as last quarter. PLANing on 70 to 75 days going forward. They would rather give terms than discounts. (Hey, they have the cash, so keep the margins is a good PLAN). Inventory turns at 4.3 and expected to continue to improve in the next quarter. Headcount at the end of the quarter was 1,969 up some 127 people (full time equivalents) with turnover at expected levels. Forward Guidance PLANing sales of $1.4 billion and full year EPS of $1.15 with comfort. No change in guidance for the street estimates. [see what I mean about the word PLAN, in creating a mind set that they have the tiger by the tail] Q&A is next, Dennis

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