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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: Skiawal who wrote (16450)	6/16/1999 9:02:00 PM
From: P314159d	Read Replies (1) \| Respond to of 21342

12 month target price raised to $14 by PCM. As of 6-14, excerpts from the report by Joel Achramowicz . From PR: 1. Fujitsu would take ownership of Westell' European assets, which will be filed in 8K, today. 2. Fujitsu would provide cash on an annual basis to fund continuing R&D work at Westell. Our target numbers take into consideration this expected offset from Fujitsu. 3.Fujitsu would manufacture and sell Westell Equipment to correspond to European ADSL demand. Royalty revenue would flow through to Westell per unit sold based on a long-term license to Fujitsu of Westell's ADSL technology as stipulated in the agreement. 4. Despite this very close agreement between the two companies, it is not an exclusive agreement for Westell and allows the Company, if it wishes, to pursue other opportunities in Europe with other parties. However, the Fujitsu relationship is very strong between the 2 cos. and in the short-term we believe this is unlikely. 5. Fujitsu has broad licensing access to all of Westell's intellectual property based on royalty payment stipulations in the agreement. 6. The 2 cos. would continue to work together on joint ADSL dev. In short, though we've expected agreement with Fujitsu along these lines, it semms particularly beneficial to the Company. Westell now continues to control expenses tightly while also providing for high-margin royalty revenues similar to the AWRE model which at times we believe has been extreme. Fujitsu is very strong in Europe with major relationships with BT and others. We understand that this agreement with Fujitsu was approved at very high levels of the Fujitsu European operation. We believe the quarter seems to be tracking well with regard to our earlier estimates and we feel encouraged by Westell's approach to following through on the commitments the Company has made to improve profitability and deploy capital more efficiently. We see this development with Fujitsu as very positive and continue to look for positive effects from this and other operational adjustements in the Company's forthcoming quarterly pronouncements. ...Joel Achramowicz >>I just received this via fax, but I did not see much mention of it here. An excerpt from the 8K filing may be helpful: These agreements with FTEL are anticipated to result in reduction of operating expenses of Westell for its 2000 fiscal year of approximately $10,500,000, consisting of $6,500,000 in savings from discontinuation of its Cambridge operations and the balance from FTEL's payments for the continued xDSL research and development work.