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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: kalicokatt who wrote (916)	3/1/2000 6:01:00 PM
From: Brian P.	Read Replies (1) \| Respond to of 3951

Motley Fool on today's events: fool.com Besides the everyday business synergies justifications, SDL is acquiring Veritech for another very good reason -- because it can. With its stock up more than 1,400% in the past year, SDL has the kind of high-powered currency that would send your average G-7 finance minister into a catatonic state of world-domination ecstasy. Based on the firm's share price of $393 1/4 on Feb. 28, the $590 million purchase price will require a mere 1.5 million SDL shares. A year ago, when SDL's shares were changing hands at a pre-split $54 15/16, that same price tag would have required the company to pony up more than 10.7 million of its shares. As in high schools everywhere, popularity in the stock market carries with it certain privileges.

To: kalicokatt who wrote (916)	3/6/2000 4:25:00 AM
From: pat mudge	Respond to of 3951

Flipping through a stack of IBD's I missed late in the week, I notice SDL was featured on March 2. For those who didn't catch it: <<<< Communications Firm Expanding Its Horizons By Alan Elliott Precious few of SDL Inc.'s shareholders are likely to grasp the inner workings of a lithium niobate modulator. What they do grasp, with both hands, is the company's 1600% climb in market value to more than $450 a share over the past year. At least 50 of those points came Tuesday and Wednesday, after SDL announced its $615 million acquisition of Veritech Microwave Inc. The move tightened SDL's hold on high-end gear used to transmit and receive signals across long-haul, fiber-optic communications lines. "We're looking to broaden our product line across the entire network and create module-level products for advanced functionality," said SDL Chief Executive Donald Scifres. The foundation for that functionality is SDL's core laser-pump business. The pumps are light amplifiers that traditionally perform laser-related duties in materials processing, data storage and medical equipment. But communications markets are what have really lit SDL's rockets. Networking bigwigs like Nortel Networks Corp., Lucent Technologies Inc., Corning Inc. and Alcatel use SDL chips to maintain the intensity of light signals traveling through long-distance fiber lines. Demand for that intensity has kept laser pump markets growing more than 70% annually. SDL tapped that growth to push fourth quarter earnings ahead 220% to 32 cents a share. Fourth quarter sales moved up 92% to $58.7 million. SDL's 1999 earnings rose 185% to 74 cents a share. Revenue climbed to $187 million, up 66% from 1998. SDL sells as SDLI near $450. Network providers are pressuring suppliers like SDL to expand beyond traditional product offerings. Companies like Lucent, Nortel and Alcatel have found crocheting a global fiber-optic sweater to be tough work. In response, they are nudging suppliers to carry more weight. Industry rivals JDS Fitel Inc. and Uniphase Corp. answered the call by joining in a $6.1 billion merger last June. The combined entity then became an unbridled acquirer, since buying a half-dozen companies, including the $15 billion E-Tek Dynamics. The new JDS Uniphase grew revenue 53% to $282.8 million in fiscal 1998. Sales in the most recent 12 months topped $629 million. SDL also has started to acquire, but more cautiously. Its strategy of judiciously minding its niche has allowed it, in terms of return to shareholders, to outpace even the snow-balling JDS. "SDL has done a superb job of staying out of bad acquisitions and really focusing on the ones that make sense," said Jeff Lipton with Hambrecht & Quist. In May 1999, SDL bought U.K-based IOC International. The move expanded SDL's reach beyond amplifier chips and into lithium niobate modulators that encode signals to be fired-off across fiber-optic lines. The Veritech deal demonstrates how SDL has carefully studied, then expanded on that move. Veritech builds transmitters and receivers. The transmitters prepare and deliver electronic data signals to the modulators and laser animators, which translate signals into light. At the other end of the line, Veritech receivers read the incoming signals, which often get beat up in the long trip across continents or under the Atlantic. The receivers dust off the signals before sending them down the wire. These links are crucial to the fiber-optic transmission chain. What makes them lucrative is the explosion of light-transmission channels. Technology called dense-wave division multiplexing is allowing networkers to multiply channels sent across a single line. Dense wave spreads each light wave into a spectrum. Each color of the spectrum acts as a separate communications channel. Sure, Judy Garland did a nice job of singing the rainbow, but SDL has its finger on its real beauty: each color channnel of each light signal needs its own transmitters/receivers. This ties a portion of SDL's sales to the industry trend of boosting network capacity almost monthly. "The industry has moved very quickly, from roughly 16 channels in the summer of 1999 to 80 channels this fall," Scifres said. In the same time frame, network capacity has grown from 2.5 gigabits to 10 gigabits a second. Now the industry is looking ahead to 40 gigabit capacity coming on line in 2001. "Our strategy is to continue to complete the product lines to provide advanced modules to make it easier for customers to use our products," Scifres said. >>>> And just for fun, another look at a comparison chart, this time with SDL's year-to-date rise equal to QCOM's: quicken.com Now, gotta run. . . off to Baltimore early tomorrow morning. Keep an eye on SDL while I'm gone. :)) Pat