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To: Elvis Jones who wrote (134)	10/17/1999 12:02:00 PM
From: Alan A. Hicks	Respond to of 168

Earnings out Thursday Oct. 21. With stronger orders last quarter, expectations after the last conference call were that CAMD could do $9+ million in revenues and reduce their loss to about $0.03 and reach profitability by the December quarter. Some interesting questions I will be looking for answers for are: With the passives industry the strongest in over three years, is CAMD finally breaking out of its revenue plateau of the last few years? If orders are again strong, is it coming from a broad array of customers? Are the size of orders increasing? Are CAMD's new silicon based integrated passives devices (IPD) solutions being accepted among a growing number of new customers? A key milestone will be how soon CAMD's IPDs represent over 50 percent of their revenues. Declines in older products have masked building momentum in IPDs up until now. They were 28% of revenues last quarter and 21% for all of last year. IPDs are expected to grow at a 100% percent rate next year according to an industry study (EAI). Crossing the 50% threshold will be important. As IPDs become a majority of CAMD's business, we should see strong top line growth and good profitability. A large part of industry passives production is done in Taiwan. The earthquake most likely tightened even further industry conditions. With CAMD's manufacturing done in the U.S., is CAMD able to take advantage of this situation? Is the combination of tighter industry conditions along with increasing need for high performance silicon passives opening new doors for CAMD's IPDs? Also high performance demands were highlighted a few weeks ago when the Rambus high speed bus did not work because of the inability to preserve signal integrity on the motherboard. That is precisely what CAMD's IPD solutions provide. CAMD already supports high speed buses in high performance servers (DEC) and telecom/datacom equipment (Cisco, Nortel). Can CAMD take advantage of the RAMBUS situation to highlight their high speed bus solutions for the PC industry? Intel will finally have their Merced (now being called Itanium) 64 bit processor out next year supporting not only faster but also wider buses that will again double number of passive components per bus (as many as 600 just for a bus). Passives on PC motherboards have already grown are from about 100 to 1500 in current Pentium IIIs. Industry studies show the need for the passives growing to 5000 on a motherboard over the next 8 years. At same time PCs and PC devices are getting smaller and performance demands are reaching critical points where traditional thick film passives will not support signal integrity of systems. Cell phones are in the same situation with 600 passives growing to 1200 per phone over the next two years. CAMD should be positioned to take advantage of these trends. CAMD has a 35% market share of the IPD market that the EAI study expects to grow over 100 percent next year.

To: Elvis Jones who wrote (134)	10/23/1999 1:21:00 PM
From: Alan A. Hicks	Respond to of 168

It was an awesome quarter! CAMD not only beat expectations but most impressive was the acceleration in new orders and new design wins for their IPDs. The summer is usually a slower quarter but $9.4 million in revenues was the highest since Q197 with orders hitting a record pace. Backlog grew $1.8 million in the quarter. The Book-to-Bill was 1.24-1. Bookings averaged over $1 million for 12 straight weeks (that includes the first two weeks of this quarter) and a yearly rate of $51 million. Orders for IPDs literally exploded up 89%. Design wins, which had been expected to decline from the very strong 43 wins in the June quarter, jumped again to 61 design wins. Last 4 quarters for design wins are 16,33,43,61. These design win numbers point to a very strong year ahead. All this is happening inspite of the short-term negatives of the Camino chipset delay from Intel and the Taiwan earthquake which disrupted some of their customers production. But, management indicated both of these situations are medium to longer term very positive for the company. Camino has delayed some design wins going into production, but the problems with Camino/Rambus enables CAMD to highlight their high speed bus solutions with their thin film silicon IPDs. CAMD sees that at 200MZ and beyond there are problems in preserving signal integrity with traditional thick film passives. CAMD already supports 400 MZ buses in servers and believes their current IPDs support considerably faster buses. Management indicated that while orders were down from Taiwan since the earthquake, they expect that once their Taiwan customers get production back on schedule, CAMD's Taiwan business could "come back with a vengeance." The Taiwan earthquake is also having the impact of opening doors to new customers since the earthquake has tightened already tight passives industry conditions. Also there has been very strong interest in the new power management chips CAMD recently announced and that these have just gone in to high volume production for the current quarter. These chips support energy-saving "sleep" mode in PCs, portable PCs and a variety of add on cards and peripherals such as modems, networking cards etc. Management also said they have begun to put a priority focus on design wins from European cell phone manufacturers with the opening of a European sales office. Management gave guidance of $10.5 - $11 million revenues in the December quarter and profitability. That would be a 25-29% growth rate over last year. This puts the company on track for 30-40% revenue growth for next year. At 1.2 * this year's revenues I believe CAMD is considerably undervalued. Traditional thick films passives companies sell for 2x revenues growing only 10-15%. I believe CAMD should be valued more as an analog IC company which sell for 5-10 times revenues. At a 30-40% growth rate, I believe CAMD should sell at least at 3-4 times revenues. With cell phone design wins it could be even higher.