Nextwave, EMLX: I have gone thru the EMLX thread and culled relevant excerpts from posts, beginign pre-IPO. Somebody like Merlin has to figure out what this means (I'm only a huntress!):
Pre IPO:
EMLX has clearly demonstrated FC adapter interoperability with all the major FC component vendors, a critical major selling point which will translate into further contracts down the road. The FC/AL hub market is crowded, but it is assumed EMLX will get their piece of the pie. These projections benefit leading revenue/PE.
----
Most of us considering EMLX stock pretty much ignore the printer revenue because we are fixated on FC and its potential. I honestly believe the FC potential more than justifies EMLX's current share price
-----
the Company's network access and fibre channel host adapter products typically have higher margins than the Company's printer server and fibre channel hub products",
Post IPO when it was trading as low as11:
The bottom line is that Emulex was too small do it's own manufacturing. When orders are strong you don't have enough manufacturing capability and when they weaken you have a ton of overhead and extra people.
This move should free them up to concentrate on engineering and sales.
I think given their contracts and the fact that FC is clearly going to ramp for real this time that they should have a higher market cap than 70M. They had revenues of 15M last quarter and a profit of $0.15
Some $5M in FC revenue.
Seems to me after the move their expenses will be greatly reduced (their margins will be lower but I'm sure they did the math and figured it was for the best)
-----
If you buy into the figures that are being tossed around for the FC switch market in the year 2000 and beyond you will see that if things unfold properly Ancor and Brocade could be another ASND, CSCO or whatever. FC is going to replace SCSI, there is no doubt at this point. Once it has a stronghold in the SAN arena, it will start to suplant Ethernet in the LAN as well. Bridges are also being built between ATM and FC. The switch market will be billions, maybe 10s of billions. Processors are getting faster in a hurry and storage is the big bottle neck right now.
The OEM switch revenues for Sequent are 20M a year. Sun has been estimated at 30M/year. In the near future (certainly this year) IBM, DEC/CPQ and HWP will be announcing plans in the storage arena. Each of their contracts will be worth at least what Sun and Sequent are worth. Additionally, there are a couple dozen tier II type OEM opportunities that will have 7 figure annual switch revenues (at least). Also, there are a bunch of LAN opportunities and military possibilities.
Brocade beat Ancor to the punch by a few months with the Silkworm. In my opinion, Ancor has a better switch. Ancor management is confident that they will win there share of the buisness and they have the product to back that up. Once they have the press releases backing that up it will be a much more expensive stock. Right now I am merely speculating but I don't want to have my face pressed against the window looking in when it does happen.
-------
May 4, 1998-- Emulex Corp. (Nasdaq:EMLX - news), an industry leader in fibre channel products and
technology, Monday announced, the industry's first gigabit digital fibre channel hub.
-------
The word is out in the industry about fibre channel and storage area networks. QLogic has been performing very well, too. So, why hasn't ANCR participated?
-----
EMLX perceived in fibre channel leadership position and seems to be trading on QLGC's report today.
-------
(P.S. By this point EMLX trading at about 60)
EMLX is on a road show touting the company strengths in preparation for a 2.1 million share offering. QLGC's report yesterday helped also
-------
EMLX mentioned in CNNfn article on microcaps:
Bob Kern (chief executive officer at Kern Capital Management), whose fund tends to focus on the technology, health, consumer and service sectors, does have a few tips for investors, though. His favorite micro-cap stocks include Emulex Corp. (EMLX), a leading supplier of fiber channel technology that Kern says may see "dramatic increases" later this summer
-------
Long IBD article:
Good article from IBD...sounds like FC is the place to put some cash!
EMULEX CORP. Costa Mesa, California At Forefront Of A Faster Network Standard
Date: 8/23/99
Author: Philip Michaels
Companies that depend on data are feeling the need for speed.
Internet service providers, electronic retailers and wired businesses need a better way for storage devices, clients and peripherals to talk with each other.
Bring it on, says Emulex Corp.
The company makes host bus adapters and hubs, gadgets used in a communication technology standard called fibre channel. Emulex sells its products to makers of network equipment, which build them into their own products to enhance access to and storage of electronic data.
There's already a sizable market for fibre channel. But its biggest growth is yet to come, says analyst Steve Denegri of Morgan Keegan & Co.
The global market for fibre channel hubs, which hit $120 million last year, should top $826 million in 2002, says Robert Gray, research director for storage systems at International Data Corp. Throw in host bus adapters, says EMF Associates, and you've got a $384 million market in 1998 - and a $2.4 billion market in 2002.
'We've got a situation where Emulex is well positioned and well entrenched with the (manufacturers) that are bringing storage area networks into the corporate environment,' Denegri said.
What's driving fibre channel's growth? The rising volume of stored data is putting constraints on traditional communication technology like small computer systems interface, or SCSI.
SCSI has limited speed and connection points. It can connect to servers and workstations in only a small area. So when data start flying fast and furious, bottlenecks occur.
That's where fibre channel comes in. It has a larger bandwidth, which lets it process data faster than SCSI. It's also more flexible, connecting to more devices. And fibre channel can connect to devices over a wide area - up to 10 kilometers compared with 12 meters for SCSI.
The result? A clear speed benefit over existing standards, says analyst Ashok Kumar of U.S. Bancorp Piper Jaffray.
Emulex is counting on fibre channel's advantages to carve out a market for its products. And those efforts seem to be paying off, analysts say.
'Emulex has the adapter of choice for many companies looking for high- quality, thorough engineering and, more importantly, high throughput and performance,' IDC's Gray said.
Today, 70% of fibre channel components are made in-house by network equipment manufacturers, Kumar says. But that's changing. Outside vendors, such as Emulex and Qlogic Corp., could capture 60% of the business by 2003.
'That's a key driver of growth for Emulex,' Kumar said.
Fibre channel's momentum has fueled the company's sales. In the fiscal fourth quarter ended June 30, Emulex saw a 213% rise in shipments of host adapters and hubs over last year. The fibre channel business now makes up 69% of Emulex's revenue.
That's good, because sales of the company's traditional networking products continue to fall. Emulex makes printer servers, wide area network adapters and networking software. Sales in that sector dipped 32% in the quarter.
Still, overall sales jumped 46% to $20.4 million. Emulex earned 39 cents a share, up from 3 cents a year ago. And thanks to its shift toward fibre channel products, Emulex's operating margin rose to 13%, up from 8% in the fiscal third quarter.
For the year, the company earned 75 cents, vs. a loss of $1.77 in fiscal 1998. Sales rose 15% to $68.5 million. Those numbers don't reflect a 2-for-1 stock split set for Aug. 30. Emulex trades as EMLX near 113.
The company is phasing out its networking products business. Within a year, Denegri says, virtually all of its sales will come from fibre channel.
That should drive profit gains. Analysts expect earnings to climb 76% to $1.32 a share in fiscal 2000 and 30% to $1.71 in 2001, First Call says.
The key to Emulex's success? Its strong ties with leading network equipment makers. The company has contracts with 70% of the world's top 30 server manufacturers, Kumar says. Most of those clients have only now begun to ship products in volume.
'The design-win cycle (for fibre channel) is very long,' Kumar said. 'It's not like PCs where you're designed in for two months and designed out in a similar amount of time.'
Emulex's clients include Compaq Computer Corp., IBM Corp., EMC Corp. and Data General Corp.
Still, dealing with these companies carries some risks, namely the inability to forecast volumes. If orders get delayed or scaled back, that hurts Emulex's results.
Another risk is that the booming forecasts for fibre channel's growth don't materialize. But analysts say the chances of that happening are slight.
'It doesn't feel to us like there's any slowing at all,' Denegri said.
---------
Friday September 24, 1:25 pm Eastern Time
Company Press Release
EMC Corp. Qualifies Emulex Fibre Channel Host Adapter for Windows NT Arbitrated Loop Configurations
-------
Here we go again! With QLGC's good earnings and the split announcement we should move higher today. I do think that this stock has to cool off a bit in the coming weeks, however, so there should be an opportunity to pick some up cheaper. Good luck!
Tuesday October 12, 7:11 pm Eastern Time
Emulex board ok's 2-for-1 stock split
COSTA MESA, Calif., Oct. 12 (Reuters) - Emulex Corp. said Tuesday that its board has approved a 2-for-1 stock split of its common shares and an increase of its authorized common shares from 20 million to 120 million.
------
EMLX] EMULEX Q1 NET 36 CENTS VS 3 CENTS
------
OKAY, SOMEBODY ON THE THREAD FIGURE OUT WHAT THIS ALL MEANS...???? EMLX IS AT 128 AS OF FRIDAY CLOSE.
JILL |
