I did listen to the CC - twice. Uh, oh, we're in trouble now - the analysts only congratulated MRVC on a good or very good quarter. Last quarter they all praised MRVC for an excellent quarter - and we all know what happened! <ggg>
Seriously, an excellent CC, but the analysts were still focusing on Inventories and DSO, which may have not come down enough to appease them, including an idiot analyst from DMG who apparently envisioned warehouses full of "obsolete" inventory laying around unused from the NN and DEC OEM dryups. MRVC said they merely opened the boxes, removed the cards, repainted the covers and re-shipped as NBase products. The guy sounded like he didn't believe it - he must be used to COMS, BAY, CS, where they DO have obsolete inventory lying around. MRVC does not. I'll be very interested in seeing what this guy writes on MRVC.
Many positive items and few negatives were mentioned. I'll try to list a few.
MRVC won many new accounts in this quarter:
General Services Administration
National Institute of Standards and Technology
US Geological Service
WorldCom!
University of Washington, Seattle
University of Mississippi
University of South Florida
UC Irvine
Stanford Research Institute
2 cities in Kansas
VNU (a major publisher in the Netherlands)
Tech University of Hanover in Germany
Bank One Ball Park in Phoenix (Arizona Diamondbacks)
City of Des Moines, IA
and just this morning, MRVC won a large financial institution in Boston away from CSCO!
Noam kept talking about convergence and "converged networks", but I'm not sure the analysts knew what he was talking about. Basically, companies have multiple networks today - one for voice, one for telecom and data, one for internal use, etc. Each of these use different technologies and have separate support staffs. This is very expensive of course. Convergence is having one network (and one support staff) handle everything. VPN's especially are going to be BIG, as it much cheaper than leased or dedicate lines.
Noam compared the acquisition of Xyplex to LU's $650 million acquisition of Livingston, pointing out that they could easily have paid "multiples" of their acquisition price. This is really true, MRVC got a steal here.
Layoffs of up to 200 employees and closing of several Xyplex offices are still in the works.
Noam talked about MRVC's advantage over Competitors several times - the ability to offer intergrated solutions to customers from the fiber up through the transport and routing layers, and now including WAN and RAS solutions too. I don't think the analysts understand this at all.
The M.L analyst (Mark somebody) asked about competition for the Edgeblaster (Bay, LU(Livingston), ASND, SHVA). Noam handled this exceptionally well, pointing out that the Edgeblaster has hardware based encryption which BAY's New Oak does not, which is very important in the speed and performance when handling multi-protocols and also a voice interface with no delay. Noam said MRVC's product was "clearly superior" to the New Oak product - great to hear!
MRVC intends to be "very aggressive" in marketing the Edgeblaster. One analyst asked about MRVC's ability to compete against the larger competition, and Noam pointed out that they are "not as large relatively as they used to be". I think he intended that more to show MRVC's growth, but also highlights the troubles that others are going through.
When will the lightbulb go on that smaller, more aggressive firms like MRVC, with strong products and no legacy products (prior to Xyplex), are causing many of the woes that BAY and COMS and CS, etc are going though? They can't seem to understand how MRVC can be doing well when the bigger names are struggling. Amazing.
Europe is strong (1/3 of all sales), Asia was 10% - Japan "good", and China and Korea, cautiously optimistic. Xyplex revenues recognized in Q1 were $5.2 million.
Noam said he has discussed "options" for increasing shareholder value with an Investment Banker.
MRVC has 500,000 ADSL subscribers? - I'm not sure I heard that right, and my wife has the phone now! |
