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Technology Stocks : LTX Corp. (LTXX) -- Ignore unavailable to you. Want to Upgrade?

To: John Miz who wrote (1873)	12/16/1999 8:31:00 PM
From: John Miz	Read Replies (1) \| Respond to of 2126

Morgan Stanley's opinion on LTXX...25 dollar price target. Key Investment Positives · Capacity and technology demand drivers. Demand is increasing worldwide for smaller, more sophisticated electronic products, such as cellular phones, laptop computers, camcorders, wireless networking equipment, and mobile Internet terminals. These new products require more advanced semiconductor devices, which combine advanced digital, analog, and embedded memory technologies. Until recently, these technologies were available only on a circuit board containing several separate devices, each performing a specific function. SOC integrates these functions on a single device, enabling lower cost, smaller size, higher performance, and lower power consumption. · Leading-edge testing technology. Historically, device manufacturers required several narrowly focused testers, designed to test only digital, only memory, or only mixed-signal devices — but not all three. The Fusion single-test platform allows manufacturers to use just one integrated hardware and software system to test all of their devices, allowing LTX's customers to increase their manufacturing flexibility and lower the overall cost of their testing processes. Importantly, Fusion's modular architecture is designed to keep pace with today's rapid changes in test technology. As new generations of devices require more advanced test capabilities, customers should be able to easily upgrade their Fusion testers to accommodate these requirements. · Top-tier customer base. With some of the world's largest device manufacturers as customers and a substantial headstart over the competition, we believe LTX is securing its position as a leading supplier of advanced SOC test equipment. · Restructured business model. LTX consolidated its manufacturing operations, increased outsourcing, and re-aligned its sales and distribution channels. This restructuring has led to significantly improved results. Operating margins improved to 12.0% in F1Q00 (October), compared to operating margins between (-12.6%) and +3% in quarters prior to the restructuring. We believe that the company can attain its long-term operating margin target of 20%. · Strong business momentum. Most of LTX's customers are at the early stages of their device production ramp. We believe the company will gain momentum as follow-on waves of capacity-expansion orders are driven by customer volume-production ramps in calendar 2000 and beyond. We believe LTX's restructured business model has shown that it is flexible and responsive in both industry upturns and downturns. On the competitive front, we believe LTX's Fusion test platform is the most-advanced SOC tester available today. Our primary research contacts have confirmed that the company enjoys a technology lead greater than one year, which should provide insulation against market downturns, potential commoditization, and pricing pressure. To keep up with rapid technological change, LTX devotes significant resources to the continued development of its testing technologies, maintains close relationships with its customers, and has a test platform with an evolutionary architecture that can be progressively upgraded to meet any new technological requirements of its customers.