Hey, Rick....... You can get the press release by clicking "news" below this post.
There is substitution of Korean (and maybe Japanese) LCDs at the margin.....where there is low information content, and the customers (probably MOT for the most part) are pressuring the TFS price on these products. Its not the end of the world, certainly. The China facility should have very low production costs. If they can grow revenues at all in this environment, they are probably doing okay. Also, they will be cash flow positive, in spite of the pricing pressure, I believe.
The basic premises of the business, I also believe, can withstand these exogenous shocks. Good technology; bulletproof balance sheet; low cost mfg. and higher-margin proprietary products coming onstream; plenty of unit orders; and, eventually, China startup costs come off the income statement and earnings are restored.
This company is NOT in bad shape internally. So be it.
With this said, management will be taken to task for not warning a month ago in the latest conference call. A thread participant asked Vince the 1998 year-to-year revenue increase question, and received a straightforward answer indicating the 25% range, if I recall correctly. These guys are honest, and I think they just did not know what was coming !!! I bet MOT just put the screws to them on pricing.
Hey....its tough out there !!! <G> mcd |
