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

To: Elmer Flugum who wrote (14286)	11/3/1999 3:53:00 PM
From: Esway	Read Replies (1) \| Respond to of 18016

NOV 3, 1999, M2 Communications - KANATA, Ontario -- Newbridge Networks (NYSE: NN; TSE: NNC) today announced preliminary estimates of financial results for the second quarter of fiscal 2000, which ended October 31, 1999. Based on current information, revenue for the second quarter is expected to be approximately $480 million. Earnings per share for the quarter, excluding the effect of items related to acquisitions and non-recurring items, are expected to be US 8cents to 10cents. "The quarter was a disappointment," said Terence Matthews, chairman and chief executive officer, Newbridge Networks. "The Company continues to perform well in Europe. Revenue from Europe in the fiscal second quarter was almost 40 percent higher than in the second quarter of fiscal 1999; however, revenue from North America was essentially flat year-over-year. "I have accepted the resignation of Alan Lutz, the Company's president and chief operating officer. Pearse Flynn, who has spearheaded the significant success of Newbridge in Europe over the past year as the Company's executive vice president and general manager for Europe, Middle East and Africa, has been appointed president and chief operating officer. "Newbridge has a number of important strengths. These include a strong cash balance of almost $900 million; a broad and long-standing customer base of over 350 of the world's largest carriers in more than 100 countries throughout the world; a world class R&D organization comprising some 2,000 experienced engineers and designers; and market leading positions in key technologies such as ATM+IP switched routing and broadband wireless. Despite the setback this quarter, the Company's ATM+IP -- or WAN (wide area network) packet -- switching revenues were up approximately 40 percent compared with a year ago. WAN packet order intake increased by approximately 20 percent on a sequential basis. "I am working with the executive team of Newbridge to finalize an action plan that leverages these core strengths of the Company and addresses issues that require attention, primarily sales effectiveness and our ability to scale customer-facing resources. We will discuss this plan in further detail on the November 18th conference call." Newbridge Networks designs, manufactures, markets and services wide area networking solutions for Internet service providers; local, long-distance, and wireless communications companies; cable television carriers; and corporate customers in more than 100 countries. The Company leverages its relationship with a growing family of Newbridge Affiliate companies and strategic alliances with numerous other networking companies to deliver complete, end-to-end solutions. Newbridge customers include the world's 350 largest telecommunications service providers and more than 10,000 corporations, government organizations and other institutions. Founded in 1986, the Company employs more than 6,000 people on six continents. News and information are available at www.newbridge.com. @M2 COMMUNICATIONS DISCLAIMS ALL LIABILITY FOR INFORMATION PROVIDED WITHIN M2 PRESSWIRE. DATA SUPPLIED BY NAMED PARTY/PARTIES.@ -0- (C)1994-99 M2 COMMUNICATIONS LTD

To: Elmer Flugum who wrote (14286)	11/3/1999 9:31:00 PM
From: pat mudge	Read Replies (5) \| Respond to of 18016

He presided at Unisys, Compaq and now Newbridge. He did not preside at Unisys nor Compaq and at Newbridge he presided with handcuffs. Unfortunately Alan will be the scapegoat for every fault the company has and those who stay on will perpetrate the myth because of their loyalty to TM. That's okay if it gives comfort, but if the company's destroyed in the process, what's gained? There were mistakes made on both sides but don't forget Alan took over a failing company and was terminated when he didn't turn it around in 18 months. Someone had to take the rap and he was the obvious choice. Terry's a born leader with enormous charisma and he can rally the troops like few others. If I were he, I'd hire a CFO from hell and give him absolute power over everything I did --- including affiliates, personal investments, golf courses, hotels, jets, charitable causes, and every expenditure under the sun. I'd hire this guy's brother to run operations --- with equal powers. And another brother to keep track of orders and sales. Clearly, someone can't count. I've never run a company in my life, so you can take all these suggestions with a grain of salt. But since I'm started, I'll continue. If I were he, I'd invent some way to get honest feedback from my employees. Not praise --- that comes without asking --- but the dirt. It could be done anonymously, but it would be required. There are a lot of Emperors running around without clothes simply because no one has the courage to speak the truth. I'd fire half my board and bring in outsiders with ruthless track records. No yes men. No yes women. Oh, forget the women --- when hell freezes. . . If I were an employee, I'd demand the company regain respect on Wall Street. I'd demand that realistic expectations be set and be met. I don't know how you do this, but there has to be a way to know what the hell's going on before the sky falls in. Were salesmen telling Alan they had XYZ numbers just to make him happy? Were they bringing in orders taken at gunpoint that were later cancelled? Was everyone smoking something????? And going further back, who let the company get so far down the wrong path before they decided all-ATM wasn't the way the world was going? Why didn't someone stop that train before it went so far? Was it hubris? If so, will it happen again? If this were a war, the general in charge would bring out a map and go over the battle step by step. Look, guys, we lost 100 men in that last skirmish. We did this this this and this, and we're not going to do that again. Mistake by painful mistake the analysis would be done. Will TM do that? Will he drag out UB Networks and Research & Development and excesses with affiliates and a long list of other sins and see what can be learned? The company has some fantastic technology --- the 50/320, DSL, LMDS --- and equally fantastic people --- in part (maybe large part) because of Alan's leadership. The company's balance sheet is respectable, the affiliate program has been cleaned up (and a few made accountable for expenses), Asian operations are more efficient, a strategic acquisition has been initiated (and now put in jeopardy), and key managers appointed (some from outside, some from within) who can be credited with many of the improvements. I'm on a roll, so hold on. . . I know there were problems. Rome wasn't built in a day. Estimating earnings and keeping expectations in line was the killer. And there are no excuses that will wash. Terry was never good at it and clearly, Alan wasn't either. But when you stand back and realize how devastating a management shake-up is at this point, you have to wonder if it was the right action. I honestly don't know. I don't think anyone on the outside has enough information to make that call. At this point everything is hindsight. If the quarter had come in on target, the bears would have gone back to their caves and all their prognostications forgotten. As it is, the quarter didn't come in and even if the company should eventually pull its way out, it won't change the present. Right now the longs are wrong. A painful truth. I have lots of unanswered questions. What exactly went wrong? Product transition? Vexatious orders and receivables? Expenses out of line? Missed contracts? And if I were still a shareholder on November 18 I'd ask some hard questions. I'd grill TM on every contract every announced. I'd want to know its status and if it's likely to change. Especially US contracts. I'd be wary of generalizations. I'd want an explanation for the quarter's shortfall and I wouldn't accept easy answers. And, finally, I'd ask TM if Newbridge is his hobby or if it's a public company with shareholders who deserve accountability. I have a lot of respect for Terry and enormous respect for Alan. But I don't respect the actions that resulted in this week's tragedy. My only regret is that anyone might have lost money because I believed Newbridge could be great. For that I deeply apologize. Regards, Pat