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To: The Ox who wrote (11884)	2/2/2000 7:25:00 PM
From: SJS	Read Replies (1) \| Respond to of 14427

Mike, Know much about these guys? _______________ LOS ANGELES (CBS.MW) -- Some investors wonder why Digital Lightwave (DIGL: news, msgs) shares continue to slip after the company posted a stellar fourth-quarter earnings report. Cruttenden Roth analyst Dave Kang has been trying to understand it himself. "The company had a fantastic quarter," said Kang. It posted revenue of $17.5 million, up 23 percent over the third quarter and doubling the year-ago total. Net income rose to $3.9 million, or 13 cents a share, up from the $2.6 million, or 9 cents a share, in the third quarter. Analysts expected a profit closer to 10 cents a share. Due to financial woes, Digital Lightwave restated its second and third quarters of 1997 and changed its management team. Since 1998, the optical networking products and technology provider has been climbing its way back to credibility with investors. "My guess (is that since) the stock was trading in the single-digit range back in April of 1998, those who got in early might have taken some profit," said Kang. Fundamentally, the company is sound, according to Kang. The company is nearly debt-free, with a debt-to-equity ratio of 2 percent. "Gross profit margin for the year was 67 percent; that's higher than industry average," said Kang. Revenue grew 167 percent in 1998 and 109 percent in 1999. As for 2000 and 2001 earnings, Kang said he expects earnings to grow to 47 cents and 63 cents, respectively. "The increasing demand for global Internet bandwidth continued to fuel profitable revenue growth for the company," said Gerry Chastelet, Digital Lightwave's chairman and chief executive officer. And Kang said that will continue to be a key to the company's future success, as the company has virtually no competition for its embedded DWDM technology, which increases bandwidth. Kang projected that revenue from that segment of business will go from zero in 1999 to 20 percent in 2000. The stock fell 3/4 to 54 13/16 Wednesday. See press release.