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Technology Stocks : Spectrum Signal Processing (SSPI)

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To: Michael F. Donadio who wrote (2060)	12/17/1998 7:51:00 PM
From: nord	Read Replies (1) of 4400

I sent an E mail to Barry Jinks with questions regarding the company the competition and the future prospects of Spectrum. He was kind enough to reply with the following thoughts. I decided to post this in an open format so that others could understand the perspective of the man in the driver's seat. I did so on my own judgement without his knowledge or permission. Norden -- If I was worried about the long term future of the company I'd be panicking. I'm not. I have my suspicions on who the sellers are. They are not insiders. Nor are they people who have any "special" information as far as I know. As far as "lack of profit" and "lack of credibility" goes, listen to the conference calls last year. We warned investors that we would be making some investments to reap the rewards later. The first half of the year went according to plan give or take. Yes, Q3 surprised everybody. It even surprised our competitors and others in the embedded systems market. Take a look at Blue Wave or Radisys (or many others). So, do they ALL have credibility problems? People tend to forget about the stuff we said that DID come true -- the important stuff for our future. Alex has been a great acquisition and we beat EVERYBODY to market on the C6x. Our slower revenue growth is due to the drop in c4x-product revenue in the year, and is being quickly made up by c6x and SHARC -- our new products. In fact, in spite of a drop off in older product revenue we have experienced a 500% growth rate in revenue from new products. Look at how we are beating our competitors. So I don't buy the "bad management" comments. By the way, not only were we surprised by the (what we believe is temporary) slow down in DSP chip sales this year, so was TI. Check out their growth and you will notice that, although DSP is a bright spot, it is still growing 15% less than in previous years (from 35% annual growth to below 20%). The chart is shown in the Nov. 30th Business Week article -- 1998 will be the slowest growth year in 5 years! And generally the growth of the embedded systems market is about 15% below that of the chip market -- which means the embedded market grew 5% at best this year. This is entirely because of a general slowdown in electronics worldwide and the technology shift Spectrum is experienced. TI or the analysts didn't predict this. But is their credibility questioned? I can't really comment on stock movement. Most of the time it has a mind of it's own and there is NOTHING I can do about it until we report our quarterly results. Especially not a week before Christmas! Barry.

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