CMTO here why:
siliconinvestor.com
Revenues for the third quarter ended September 30, 1999 were $25.3 million, an 85% increase over revenues of $13.7 million reported in the same quarter of 1998. On a sequential basis, the Company's revenues increased 17% from $21.5 million in the second quarter of 1999
TERN:
Terayon reported revenues of $23.4 million for the third quarter of 1999 compared to $9.4 million for the same period of last year.
CMTO:
Com21 reported a net loss for the third quarter of $2.5 million, or $0.12 per share, compared to a net loss of $2.5 million, or $0.14 per share, reported in the third quarter of 1998.
TERN:
The net loss for the third quarter of 1999 was $1.7 million, or $0.08 per share, excluding third quarter non-cash charges of approximately $700,000 for the effects of the amortization of intangible assets and $11.0 million for charges related to in-process research and development related to the Imedia acquisition and $11.2 million for the cost of two warrants to purchase common stock. Including the charges related to amortization of intangibles, in-process research and development and the cost of the two warrants, the net loss for the third quarter of 1999 was $24.6 million or $1.18 per share. The net loss for the same period in 1998, was $6.5 million or $0.63 per share ($0.44 on a pro forma basis).
CMTO:
For the nine-month period ended September 30, 1999, Com21's revenues were $66.0 million, compared to $29.4 million reported for the first nine months of 1998. The Company reported a net loss for the nine months ended September 30, 1999 of $6.3 million, or $0.30 per share, compared to a net loss of $10.9 million, or $1.09 per share, during the same period last year.
TERN:
For the nine-month period ended September 30, 1999, revenue increased to $58.3 million compared to $18.8 million for the same period last year. The net loss for the nine month period ended September 30, 1999 was $9.4 million, or $0.47 per share, excluding non-cash charges of approximately $700,000 for the effects of the amortization of intangible assets, $11.0 million for charges related to in-process research and development and $24.0 million for the cost of two warrants to purchase common stock. The net loss for the same period in 1998 was $17.8 million, or $2.73 per share ($1.37 on a pro forma basis), excluding a dividend of $23.9 million, or $3.66 per share, recorded in connection with certain equity financing. The net loss for the nine-month period ended September 30, 1999, including the non-cash charge related to amortization of intangibles, in-process research and development and the cost of the two warrants was $45.1 million or $2.27 per share. The net loss for the same period in 1998, including the dividend, was $41.7 million or $6.39 per share ($3.21 on a pro forma basis).
CMTO:
"Com21 now passes more than 12.6 million households worldwide," said Dave Robertson, chief financial officer. "During the third quarter, we sold more than 80,000 cable modems, representing a unit increase of 239% over the same period of 1998. In addition, we shipped 91 headend units, bringing our total to more than 770 worldwide. Operating expenses were 51.1% of total revenue, representing a 4.4% decrease from the second quarter of 1999. Gross margins were 35.4%."
TERN:
Terayon CEO Zaki Rakib stated, "Terayon had an outstanding quarter by any measure. The company had strong revenue growth, and continued to make significant improvement in gross margins, reaching 28 percent. We shipped 68,500 modems and 314 headends, bringing total shipments to date to over 227,000 cable modems and 1,127 headends. Terayon continues to build market share for our broadband cable modem systems, as we ship systems to both current and new customers. Strong customer orders are propelling significant market growth in North America with Rogers Cablesystems and Shaw Communications; in Europe via United Pan-Europe Communications (UPC) and German operator PrimaCom; and in Japan, with Jupiter Telecommunications
Notes from CMTO conference call:
Very strong quarter. Tenth consecutive quarter of reaching internal goals. Households passed increased by 700,000. Modems shipped were 80,000, up 239% y/y and 31% sequentially.
Industry growth estimates for '99 were set at 1.5 at the outset of the year, by mid-way, 1 million had been shipped and estimates were raised to 2 million. CMTO continues to gain market share. Success is due in part to ATM selling well globally. In addition, 10,000 DOCSIS modems were sold this quarter.
Certification: We've submitted DocsPort modem to current wave begun last Friday. Results will be announced on Dec. 9. Several changes: this time there was a 6-week testing period between waves, as opposed to only 2 weeks in earlier waves. We've put modems through many tests and have worked closely with CableLabs , including dry runs. We've also replicated these in our own labs.
Financials: (see press release)
Operating expenses were 51% vs. 56% in Q2. Gross margins were 35.4% vs. 44.1% --- due to greater mix of lower margin modems and a shortage of flash memory chips, making it necessary to go to the spot market. Shortage due to sales in cellular. We're working on higher margin products, including those for small and home offices. ASPs wer ein line with expectations, slightly down from last quarter.
Cash on hand: $110 million, DSOs 52 days. Top customers were ATT/TCI, Fujikawa, Philips, and Siemens, representing 54% of sales. DOCSIS revenues continue to grow and products continue to win approval from users across the board.
Market is not for data alone, but for voice, security, home networking and tiered services. We're adding customer premise modems that include privacy, fire walls, and networking, and migrating communications platform to DOCSIS and DVD (Europe). We're also designating key personnel to the CableLabs PacketCable initiative.
Q&A:
Q: Wireless opportunities.
A: Still in trials. ATT, SUN and CMTO all up on a system and it's been running nearly flawlessly for nearly a year. Submitting proposals. It's a good fill-in for where DSL doesn't reach. Prospects are good for 2000.
Q: What about RFPs in DVB market?
A: Market for DVB is developing more slowly than DOCSIS. Expect trials in middle to end of next year and sales at end of 2000.
Q: Affect of flash memory prices on Gross margins?
A: Impossible to predict numbers. Many factors.
Q: How many products affected?
A: Affects both DOCSIS and ATM modems.
Q: Prospects re: cost of flash memory?
A: Varies by product. Small proportion of value of modem, though becoming more significant. Working on committment that meet our requirements. That's been taken care of for now.
Q: What is potential with @home?
A: They don't buy products directly but we do work closely. We partner through TCI.
Q: What about 5000SoHo modems?
A: We're excited about the 5000. Everyone wants equipment to try out --- several beyond that.
Q: Business class CPE? When will it be developed, expanded?
A: Will introduce more over next several months. Part of strategy is to move to high end. Several companies want to work together: TUT Systems and Sonic Wall (not sure I heard that right).
Q: How about employee retention?
A: It's a problem in Silicon Valley. We've added 10 to a total of 209. Those we want to leave are gone.
Q: Geographical mix?
A: International was 48%, domestic 52.
Q: Head-end shipments?
A: Different customers take head-ends and there continues to be good demand. Will switch to DOCSIS head-end in 2000.
After the CC, I phoned and asked a few more questions. Answwers are paraphrased:
Q: I noticed a slow-down in growth in homes passed. Any reasons?
A: In the US we don't count DOCSIS. We only count where our system is proprietary. We also only count those head-ends where customers have two-way service. In Las Vegas, for example, initially there were only 50,000 homes with two-way service. That's increased to 590,000 now.
Q: Were gross margins in line with expectations?
A: Prices did what we expected. Flash memory shortage was due to growth in cell phone market. (Explanation of memory market and lack of expansion. . .)
Q: Any explanation for change in geographic mix?
A: It varies quarter to quarter. This time we shipped a lot to Japan.
Q: Wil SBC's DSL launch hurt cable growth?
A: Actually, any increase in broadband sales are good for everyone. You'd be surprised how many Internet users don't have any concept of broadband. Marketing builds awareness on both sides.
Q: Is Cable still in the lead?
A: Research data from 4 or 5 months ago said there would be 60 million Internet users by 2002. Of those, 13 million would be broadband cable users. A different report said there would be 16 million cable users and 8 million DSL. The biggest growth in DSL is due to alternates. These services justify their existence.
We discussed alternates who offer both cable and DSL and how they're succeeding on both fronts.
I haven't read any analysts reports, so don't know how the Street is responding to the conference call. Based on the number of "congratulations --- good quarter," I'm guessing they were pleased.
That's it for now --- |
