DS.
i culled the following post off the fool board from someone who apparently listened to the CC and took good notes.
-chris.
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Subject: Snapshot of a GREAT quarter...
Date: 2/18/99 9:33 PM
Author: hompluem
STRONG balance sheet:
-Gross margins were stable at 59.2% (20 b.p. rise from 2Q).
-Accounts receivables DSO decreased 1 day to 61 days, which is very impressive when you consider its large jump in oversea orders.
-Inventory days decreased to 8 from 9.
-Inventories increased $1 M to $12 M.
-Cash increased to $68 M from $10 M.
-No debt.
-R&D spending remains flat as a percentage of sales.
Product mix:
Fibre Channel – 80% of sales compared to 60% last quarter. In November, the company introduced a high performance, high reliability clustered server which is selling like hot-cakes and makes up 20% of the total filers shipped during the quarter.
Net Cache – Grew 80% sequentially, which accounted for 8% of sales compared to 5% last quarter. There were 30 new accounts for Netcache, which included PSI Net, NTT, and Global one.
Database booking – 7% of sales compared to 6% last quarter.
Geographic mix: Int'l sales grew 89% sequentially. Int'l made up 41% of total sales from 26% in the last quarter.
Europe – increased 100% sequentially, which accounted for 33% of total revenues compared to 19% last quarter. Included several large deals over $1 M that included BMW, Renault, and Ericcson.
Asia - up 20% sequentially and made up 8% of revenues.
N. America – 39% year to year but declined 8% sequentially, as the mix declined to 68% of total sales. It added over 190 new accounts, which was up from 170 last quarter. The company reported that they had “accelerated order growth” late in the quarter which will boost its Q4. NetCache grew impressively, and it is now 30% of total N. America revenues, which is up from 20% last quarter.
ASP remained strong:
Up 3% for the quarter. NTAP is shifting towards higher margined, higher ASP prouduct mix…henced, the strong showing in the GM numbers.
Competitive landscape:
The company claimed increase win rates in ALL areas and it remains VERY STRONG. In fact, management claimed that they were especially strong in the cache sector. Competition is perhaps is the most important issue for NTAP…in fact, CSCO is introducing a new network caching product, but it is still in beta testing. NTAP claimed that Auspex's new product is using technology that it has successfully faced before. At this point in time, the traditional server vendors are not yet specializing in the appliance arena, but the growth in the industry will attract competition. NTAP is the market leader and technological leader…barrier to entry to copiers appear to be quite difficult. Right now is the PRIME time to win the customers and expand market share.
What's in store?
The future is much BRIGHTER than the sun. Data storage is EXPLODING. The NAS concept is CLEARLY appealing and the importance of the market is beginning to be realized by more-traditional customers and the investment community. A late surge in domestic orders should boost the top line for the Q4. The company stated that they had a successful quarter in hiring salesmen and engineering personnel, which is consistent in the company's objectives of growing NOW. NTAP will continue to add to its sales capacity and research and development to drive revenue growth. OEM agreements with Dell and Fujitsu remains on track and should begin to ramp revenues in the second half of this year. The added exposure and sales force should help shove the NAS concept. NTAP has the ball in the vast open field, now they just have to run with it ...
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