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Technology Stocks : HAUP - Hauppauge Digital -- Ignore unavailable to you. Want to Upgrade?

To: Louis Riley who wrote (1139)	3/29/2000 9:32:00 PM
From: Louis Riley	Read Replies (1) \| Respond to of 1149

Hauppauge Warns of Lower 2000 Earnings; Shares Fall (Update3) By Michael Lovell Hauppauge, New York, March 29 (Bloomberg) -- Shares of Hauppauge Digital Inc. fell 47 percent after the No. 1 maker of video cards for personal computers said its fiscal 2000 earnings will be hurt by slower-than-expected demand for digital television. Hauppauge shares fell 18 to 20 1/2 in Nasdaq Stock Market trading of 5.55 million shares, almost nine times the three-month daily average. The Hauppauge, New York-based company said it expects fiscal second-quarter net income of about $200,000, or 2 cents a share. Sales for the quarter ending Friday will be about $19 million. Its revenue was $14.5 million a year earlier. Before today, Hauppauge shares had risen sevenfold in the past year. Higher costs for setting up international offices and ``persistent slow acceptance of digital TV products in the U.S. may have a continuing negative impact on the company's performance for the rest of fiscal 2000,' said Ken Plotkin, the company's chief executive officer, in a statement. Slower-than-expected demand for digital television surprised First Albany Corp. analyst Joel Krasner, who expected Hauppauge to earn 14 cents a share in the second quarter. ``I did think digital television was going to receive a greater reception than the company is suggesting it will,' said Krasner, who has a ``neutral' rating on the stock. ``The fact that it's not will have repercussions for the next several quarters.' Hauppauge's WinTV card gives users access to radio, TV and data broadcasts through PCs. Digital and Internet broadcasters may be interested in Hauppauge's technology because it can help a PC function much like a high-definition television for a fraction of the cost, analysts have said. Krasner said Hauppauge soon will release technology that will let customers record television through their PC and that it is well positioned should demand for digital television increase. The company plans to report its second-quarter results during the first week of May.

To: Louis Riley who wrote (1139)	3/30/2000 9:04:00 AM
From: Zeev Hed	Respond to of 1149

Louis, first, I want every one to know, I am not making a table pounding argument as I did in Feb 1999 (stock then at $4 split adjusted). Yet, the stock is now cheap relative to the market. Despite the fact that Digital TV is taking off slowly, their top line increased by 30% relative to last year. I expect the next few quarters to be even with or greater than the current quarter, thus yielding annual sales of $80 MM for a company that now has a market cap of less than $180 MM. As long as they are operating in the positive cash flow mode, I do not see what is the problem you have with the fact that they have "only" $5 MM in cash, that is quite ample particularly in view of the fact that they probably will have some $10 MM plus in accounts receivable. Digital TV is slow in coming, but it is expected to be accessible to all in the US by 2002. I see nothing wrong with a company spending (and thus impacting its bottom line) for a market that is going to be in full bloom in 18 months or so. I think that the hickup, while not pleasant, is not anything pointing to be intrinsically wrong. Their reduced profits are fully accounted for by at least $500,000 in additional investments in a marketing and sales organization in Europe where DTV is much more prevalent. That is what I would expect a smart company to do, invest where the market for your products already exist. This company is far from being a POS as stated by a number of people here. Buying in the $18 to $22, which is also the area of the last breakout should prove rewarding. If we break this are, I'll have to reexamine my tenet and look for additional problems. I do not expect anything more than a DCB in the next few weeks, but after that, we might have anticipation of better times (providing we do not slide into a bear market, than all bets are off). Zeev