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Technology Stocks : QUANTUM
QNTM 6.480-5.8%12:24 PM EST
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To: paul lin who wrote (8703)4/27/1999 10:42:00 PM
From: TechMeister  Read Replies (4) of 9124
 
Conference call synopsis:

TRACKING STOCK COULD BE ISSUED AS EARLY AS MID JUNE!!

The bottomline:

DLT business is a 45 % gross margin business growing at 25% per year.
It earned 57+16 = 73 million dollars (do the math)
which is 73x4 = $292 million in one year = 292/172 = $1.68 EPS per year. Growing at 25%, it should be valued at 25 x 1.68 = $42.
Throw in $10 (what a bargain !) for the HDD business, and you have $52
as the fair valuation of this stock.

If even if you get HDD business for free (Buy DLT, get HDD for free!)
its a great deal at this value.

Con call:

DLT business: DLT: super DLT on track for early next year. Not much overlap between DLT8000 and super DLT. DLT market will grow at 25% annually. ATL is even more awesome. Its growing at 40% annually and has IBM as a customer. ATL had 18% higher sequential revenues ($63 m)
ATL has 35% gross margins. DLT business net operating income of $105 million.

HDD business: 5% lower sequential revenues due to soft pricing. Net loss of 16 million due to high end losses. Desktop was profitable.
6.8GB GMR product shipping in volume. Ahead of competetion here. No problem getting GMR heads.

Quantum quickview shipping in TiVo and Replay networks. Huge opportunity. IDC forecasts 14 million units in 2000.

High end drives: Atlas IV and 10 K now being qualified at OEMs. 10K qualified at top 4 OEMs for servers. Expect prfitability in 2H 99.
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