Xylan conf. call (post 4)
CFO: IBM inv. position too high in summer. Pleased to note that inv. has dropped to 5 weeks.
ALA revs were 13.2, down from 15 in Q2. 15% of total revs, vs. 18% in 3Q. Recently signed new extension to ALA contract that gives them favorable sales terms on full range of our products. So, only slight increase in revs next quarter. ALA inventory levels have now dropped from 5.5 weeks to 4 weeks.
Overall small switches acct. for 22% of revs, vs. 14% in June quarter. Strong market accept. of new small switches. Gradual ramp in OmniSR thru 1999. Held Omni out of 3Q revs because in test labs.
Gross margins were 56.7, vs. 56.8 in 2Q. Doubled small switch revs. and yet still maintained margins. Expect to be able to maintain margins in 4Q.
Operating expenses stable at 40.7%.
Operating income was 16.1, vs 16.3 in June.
Net profit was 10.4MM, increase of 8.7% seq. EPS is based on 47MM shares.
Headcount increased to 1,000 vs. 938, 613 one year ago. |
