Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (13424)	9/24/1999 12:02:00 AM
From: pat mudge	Read Replies (3) \| Respond to of 18016

In trying to summarize the analyst conference and general meeting, it's hard to be completely objective after so many excellent presentations and demonstrations, but I'll try. Highlights from Alan's address to analysts: * We're a different organization run by different people. Of the 16 on the management team, 12 are new, 5 brought in from the outside and the rest either promoted or maintained from within. * We have a different portfolio. France Telecom is not part of G1 -- this is FT's national network and a major win. The contract with Argentina's Movicom holds more significance than appears on the surface due to BellSouth's involvement and the size of the markets they dominate. Toshiba affirms the strength of LMDS and with the 50/320 close to launch and the additions of Northchurch and TimeStep, IP-ATM convergence continues on course. * We have a different product mix. TDM is down to 25% and WAN Packet at 75%, with ATM doubling annually. * We're a different company financially with more than $1 billion in cash after acquisitions. * We have a different propensity for doing deals. The relationship with Siemens has evolved into a distribution agreement. * We're a different company in operations. 80% of the problems have been solved. We're running differently now. Additional points: * We've identified niches where we can dominate. * Will concentrate on improving balance sheet. * SAP will be turned on Nov. 1. * Will complete IP with additional acquisitions. [700 to 800 engineers focused on IP now.] * Will add distribution partners, including in the US. * Growth in Europe up by a factor of 5. * We're pursuing MCI [NN also being pursued. . . .] * Pending SBC-Ameritech merger will add new opportunities. Like any piece of literature whose worth is hidden between the lines, the benefit of attending an annual meeting comes in between the formal presentations, during those 3 and 4 minute conversations after a demo or the extended discussions over a glass of wine or cup of coffee at the end of a session. "What are your plans for targeting specific journalists?" "What's happening at MCI?" "What are you saving for Telecom in Geneva?" "When do you expect LMDS to reach 5% of revenues?" "What's the status at NextLink?" The questions pour out. An answer is half formed when someone interrupts and you later remember you never got what you wanted. Then you smile realizing you got more, only in a different form. Or an introduction is made and a conversation begun only to be cut off by someone's, "I want you to meet. . ." or "Have you seen. . .?" At some point you have to stand back and try to piece it all together. If there was an over-riding tone after the AGM, it was one of relief combined with excitement. Relief that the company's well on its way to financial success and excitement that products and services are moving from fantasy to fact. The leadership team is not only in place but well along in creating the New Newbridge. [See today's press releases for proof.] Newbridge is made up of people. Talented people. Every time I've attended a conference or show, I've met employees who've amazed me with their knowledge and ability to share it with a novice. To focus on one isn't fair, but if the company could find a way to clone Brian Jervis we could all fold our tents and go home. When it comes to understanding switching he's Mozart in a world of Saliari's. That's high praise as Saliari was no slouch. From the president's office all the way through the ranks it's the people who make NN the company it is. I was especially anxious to meet Satjiv Chahil and he didn't disappoint. I knew he was talented but wasn't prepared for his sense of calm. I'm told he moves with great care and modulation. Besides reorganizing the entire marketing organization (see slides on webcast), he's optimizing every resource for maximum effect. As an example of targetted marketing, he developed a video to be played on every flight going to Geneva for Telecom '99. It's designed around the World Rugby Championship and features the DMDS solutions. He also hired a biplane to fly over a Cisco-hosted conference where NN was also present --- with a banner reading: " www.newbridge.com." Forbes and Business Week have full-page NN ads, again targeted at Telecom '99 attendees. It's been difficult to wait through long stretches of silence in between press releases, but Satjiv and Alan both believe they have to bring out contracts to back up product launches. It's the difference between telling and showing. You can talk about new products and services till the cows come home but if you don't have customers to support their verity, you're blowing hot air. When the Street puts you on probation, the rules are tough. Earnings consistency will change the rules. Quarter by quarter they'll ease until NN's the new darling and unable to do wrong. But I get ahead of the story . . . Before I close, a warm thanks to all those who introduced themselves and made me feel welcome. Pat

To: Ian@SI who wrote (13424)	9/24/1999 7:47:00 AM
From: Glenn McDougall	Respond to of 18016

Newbridge moves please analysts Change in direction: Repositions itself to offer broader package Jill Vardy Financial Post OTTAWA - Newbridge Networks Corp.'s transformation over the past year has helped ensure it's a player in the hottest new niches of the telecommunication business. This was the message the company gave at yesterday's annual shareholders meeting and at an earlier meeting of analysts. "I'm feeling pretty damned good about Newbridge," said Terry Matthews, chairman and CEO. "Our target market this year has dramatically changed and you can expect from the company much better performance." While analysts at the meeting weren't quite so enthusiastic, they seemed pleased with the telecommunications equipment company's recent management changes and acquisitions, which they say have fixed production problems and Newbridge's poor public visibility. "We heard a well-articulated strategy, some exciting products and some nice contract announcements," said Paul Silverstein, technology analyst at BancAmerica Robertson Stephens, who rates the stock a "buy". Newbridge is repositioning itself as a company selling not just network switches, but complete technology and services solutions. Its customers are typically large phone companies, telecommunications suppliers and Internet service providers. One problem for customers is that while half the traffic sent over their networks is data instead of voice signals, sending that data returns just 10% of their revenues. So Newbridge will differentiate itself from its giant competitors by selling a package that will allow customers to increase their services and, ultimately, their profits, said Alan Lutz, the company's president. Newbridge hopes this differentiation will help it compete against much larger rivals like Cisco Systems Corp., Lucent Technologies Inc., and Nortel Networks Corp. "This is a tough business to be in. But it's a lot tougher because I'm in it," a grinning Mr. Matthews told the shareholders. The next year will see the company concentrate on improving its balance sheet, expanding the use of outside contractors to speed up manufacturing, buying companies to complete its line of Internet Protocol products, and signing up distribution partners, Mr. Lutz said. Newbridge also announced yesterday that Intel, the chip manufacturer, has bought a division of Stanford Telecommunications Inc., a company Newbridge bought last June. As part of the transaction, Newbridge and Intel will work together to create next-generation silicon chips for wireless telecommunications. Stanford Telecom, an expert in high-speed wireless communications, cost Newbridge about $490-million (US) in cash and stock. But the deal was predicated on Newbridge being able to sell several of Stanford's units, keeping only its wireless division. Intel bought the telecom component products division. ITT Industries of New York has agreed to buy Stanford's defence communications business for about $191-million (US). Selling those Stanford divisions will bring the acquisition cost down to $280- million (US), Newbridge said. Newbridge confirmed it has signed about $500-million (US) worth of contracts to supply switches and wireless communications equipment to France Telecom, Movicom of Argentina, and Toshiba Corp. Analysts said they were encouraged by the new marketing plans to increase its visibility among customers in the U.S. Robert MacLellan, technology analyst at CT Securities, called the marketing strategy "encouraging and long overdue." Newbridge has been considered by analysts good at making equipment but poor at promoting itself. The company has adopted the slogan "The way networks work," which will be the heart of an intensive advertising effort to make the company better-known in key markets, said Satjiv Chahil, Newbridge's executive vice-president of marketing. Analysts say they're waiting to see the completion of Newbridge's plans in the fast-growing Internet Protocol market, in which the company is a late entrant. Newbridge has recently purchased two companies, TimeStep Corp. and Northchurch Communications Inc., which both develop IP products and services. Newbridge, which already owns a one-third stake in both companies, will pay $350-million over the next two years to buy up the remaining portions of both. Mr. Lutz said more acquisitions will be announced shortly.

To: Ian@SI who wrote (13424)	9/24/1999 7:55:00 AM
From: Glenn McDougall	Respond to of 18016

Newbridge coffers prepared for acquisitions Chairman says company has expanded its market potential by moving into Internet, broadband multiservice markets SHAWN McCARTHY The Globe and Mail Friday, September 24, 1999 Ottawa -- Newbridge Networks Corp. is sitting on a warchest of $880-million as it looks for more acquisitions to consolidate its position in booming Internet and broadband services markets. Newbridge chairman Terry Matthews said the company has changed dramatically in the past few years, and has greatly expanded its market potential by moving aggressively into solutions for Internet providers and broadband multiservice sales. "Our target market has dramatically changed and you can expect to see from the company a much better performance," Mr. Matthews told shareholders at the company's annual meeting. He said Newbridge's target market is 10 times what it was just three years ago. The company also said yesterday it had moved a step closer to clinching a key acquisition of Stanford Telecommunications Inc., and announced three major contracts worth more than $400-million (U.S.) over the next several years. Senior executives promised more acquisitions in the near future, but refused to discuss specific targets. Mr. Matthews and Newbridge chief executive officer Alan Lutz assured shareholders that the delivery problems that plagued the company last year are now behind it. Mr. Lutz said the company was unable to complete $115-million (Canadian) worth of sales because of delivery backlogs in the final quarter of fiscal 1999; that figure dropped to $10-million in the first quarter of this year. Mr. Matthews said the company encountered some problems over the past year because it was undergoing a major overhaul of its product lines and corporate offices. Newbridge has deliberately moved away from a reliance on time division multiplexer (TDM) switching technology -- which is a mature market -- and into the broadband multiservices. The company saw its revenue from broadband multiservices technology grow 43 per cent last year and analysts are expecting Newbridge's revenue from that product area to increase 50 per cent this year. The company announced yesterday it concluded a memorandum of understanding with Toshiba Corp. for the distribution of Newbridge's local multipoint distribution services (LMDS) network equipment in Japan. The deal would be worth at least $350-million (U.S.) over the next five years and includes co-operation in joint product development and manufacturing. The technology allows service providers to deliver data, Internet, voice, video and multimedia services from a single platform to residential and business customers. The company also announced that Movicom, an Argentine BellSouth affiliate serving more than a million mobile-phone customers in the Buenos Aires area, will use Newbridge equipment to create a national broadband network. The value of this agreement to Transistemas, a Newbridge subsidiary in Argentina, is estimated at about $50-million. Mr. Lutz said BellSouth has subsidiaries and affiliates throughout Latin America. "We see this as the first tranche of several in the future," he said. Newbridge also moved a step closer to closing one key acquisition, the $490-million (U.S.) purchase of Sunnyvale, Calif.-based Stanford Telecommunications, which produces broadband wireless technology that complements Newbridge's own offerings. Yesterday, the two firms announced the sale of Stanford's defence communications business to ITT Industries. Mr. Lutz said he expected that deal to be completed by the end of November.