Tulvio, Here is a quick summary:
1. NUKO is involved with providing part of the solution ( video transmission) to the "BANDWIDTH" problems being faced by telecommunications companies on an increasing basis.. This is a very big fast growing market.
2. Alliances and Relationships: As a start up company they already have formed some significant alliances and are working with several of the big TELCOS, (Nortel, Westell, Cisco, Alcatel,Samsung, Pacific Bell, Bell South, Southwestern Bell,Korea Telecom, & TELUS ).
I interpret these alliances and relationships as an endorsement of what NUKO has to offer. Technically their product offering is beyond my understanding so I rely on the vote in the marketplace. Todate they seem to be getting the right votes.
3. The Conference Call of 10/25/96:
a) They stated they were going after a very well defined part of the market for now. Advanced digital video networking, corporate, government, campus. Applications such as ;remote training, telemedicine, advanced video conferencing, etc.
b)The CEO said: they had passed all acceptance criteria at customer sites; accepted by system integrators; now have 12 major customers; that 25 new companies have been brought to NUKO from CISCO (all large fortune 1000 customers with funded projects); that Nortel brought in significant orders in the 3rd Q; That they passed significant testing by Lockheed and Korea Telcom.
c) Bob Kondamoori, CEO, stated that he was "CONFORTABLE" with Unterberg Harris '97 projections of $72 million in revenue and $0.75 in EPS.
4. For fiscal '96 they will book in excess of $10 million in revenue of which most is for what they call "initial phase" business. This I do know to be the nature of the TELCOS business. Most istallations will involve multiple systems, and big, what I call, "follow-on" activity as the TELCOS implement the service from city to city.
That is how one supports a jump from $10 million in '96 to $72 million in '97. A lot of that business will be "follow-on" and will happen later in '97 as TJ Singh of Unterberg has forecasted.
5. The risk that the TELCOS might drag thier heels I tend to minimize here for a couple of reasons. 1) The competitive situation between the TELCOS and the Cable companies is such that it isn't in their interest to not move ahead quickly and 2) If some orders do get delayed, $40 million in'97 would be just fine and certainly supports todays price.
Understand , this is not a "value" investment. We are talking "pure growth". Without it we aren't.
Well, those are my comments and opinions. Like to here your feedback. |
