Went to Lightpath today for a ribbon-cutting ceremony. This is a report I wrote for the Yahoo board -- a lot of what follows are answers to questions people on Yahoo had. (3 posts combined).
When I walked into the building where the ribbon-cutting ceremony was being held, I couldn't help but notice a wonderful feeling of goodwill and excitement pervading the room. I ran into Don almost immediately and he is as enthusiastic a person as I had remembered him to be.
For some reason I was expecting just an extra room, but the ribbon-cutting was held in an entirely separate, ivy covered building on the same street (looked like ivy anyway). I was surprised by how large it was, so large that acoustics were affected. There were between 130-150 people there (hey, did you expect a head count?), hard to say exactly (and a photographer). Sheila coordinated the event and did a great job -- the food looked delicious but I didn't have time to eat anything with all your questions. A lot of the people were employees, most of them having come on after the first of the year. There were also dignitaries although I couldn't get anyone to tell me most of their names, rank and serial #'s. I think that was because I might make erroneous assumptions, and it's true, I probably would have.
I sure hope I get everything right. Think I'll send a copy to Lightpath so they can correct me when I get things wrong.
Don's talk was short and to the point. He introduced the man from Hikari (whose name I can't spell - meant to find out but missed) and Mr. Richter from Rodenstock. Lightpath, Rodenstock and Hikari are forming a strong alliance TOGETHER. Now this next part...I can't remember if it was in Don's speech or if it was what I heard later...but...obviously, the emphasis is on 'together' and the best news of all (for us fiberoptic fans) is that the focus of this alliance is NOT traditional optics but optical telecom. With this new alliance, Lightpath's market will expand to include Europe and Asia in a manner not possible before.
Don said that Lightpath has the ability to make the collimators for 1/2 THE PRICE of the ones that have been traditionally made overseas! That's quite a statement (hope I got it right) and very impressive. People usually get things done overseas to save money. The key of course, is automating a labor intensive process.
Don also said in the speech that he expects the number of employees to go from 125 (!) to 200 (!!) in several locations (9 mos. ago they had around 25). They are working 24/7 and they have the capacity to expand.
The Mayor of Albuquerque was there to say that ABQ would help the growth of Lightpath in any way they could. He congratulated the people at lp for being in on the ground floor of an industry that's just beginning (paraphrasing here, of course) and commented on how far ABQ has come in being a home for tech companies. (think Forbes said it was now #7).
Then they had the ribbon-cutting, socializing...and your questions...That's the next post.
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Hey, thanks, guys. Your enthusiasm sure makes it worth the time it takes to write this stuff (not being the writing type). Still have one more to write.
I forgot to mention in the first post that the clean room could be seen through the glass windows beside the large space where the ceremony was held. They also had some photos of collimators, the Laor switch and the collimator fusion machines on stands in the front of the room -- maybe they will (or have, I haven't checked) put them on the website. The clean room looks great.
Bill Walters, who is a terrific asset to Lightpath, was just as friendly as before and answered whatever questions he felt he should and then the rest were answered by Don later on. Together they made sure all your questions were addressed in one way or another.
If I miss anything, let me know.
There are 13 collimator/fusion set-ups up and running at this time (24/7). They look like long counters with mirrors and gadgets on them. 10 are for production, 2 are for product development (that was good to hear) and one is used for training. They plan to have 10 more up and running by the end of July and plans to increase to 10 more after that but not sure when that will be.
I also saw the testing machines and, at this time, they test everything to make sure that all is as it should be. That was excellent to hear -- attention to detail and quality control is priceless.
Each collimator fusion machine can put out 5,000 parts per month. The range in prices for the collimators is broad. $15-$16 for the tiny ones up $90 or so for others. Custom made collimators (and I'm assuming the larger ones) can run between $150-$200. Lightpath is focused on making collimators for less than any company can make them on their own. My understanding is that no one can make collimators better or for less money than Lightpath and that the quality is outstanding and unmatched. They expect to keep growing (in terms of orders). They would not break Hikari out from the mix but Don said that, with 20 machines going, they had the ability to make about $40 million a year with the collimators.
50% gross margins are holding and that's something very important to them. It's like a commitment they've made to themselves (and us, of course).
We won't hear anything about the matrix switch until after the end of the year. They are keeping this close to the vest. Things are progressing (i.e., staffing in NJ). They had designs (pathways), not prototypes, before they opened their facility on the East coast. They are mum on the level of development of the matrix switch.
The Laor switch will be shown at the NFOEC in Denver in August (I think it's August) with test data to support it. People can begin testing it for their own use at that time.
The relationship that Lightpath has with Lightchip is one of complete support. They do not care whether or not Lightchip uses any of Lightpath's products (Lightchip wants their switch). All Lightpath wants is for Lightchip to create a product that people want to buy. Don feels that Lightchip will be a winner for all of us.
They view Gradium as a tool, but just one tool in their box. They have had to put in 3 more big furnaces to meet demand for Gradium since it does work as advertised. They will continue to support their existing business in conventional imaging optics and they will develop new families of glass as appropriate. BUT, and I like this but, their focus is now in telecom. I forgot to ask about the status of Storz (just realized that now).
More in next post.
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Thanks again, guys. I didn't realize it would take so long to write and I never expected such enthusiastic response. Nice. This is the last one.
They are not making circulators or laser pumps at this time. Laser pumps probably never; circulators are a possibility in the future (I think that was said in the sense that a lot of things are possible in the future). They are concentrating on passive, not active products right now.
They are basically working with everybody in the industry. I don't have anything to relay about Solaria though. Sorry, time ran out but there are things happening with Solaria -- or that's the impression I got anyway.
There was a mutual fund manager there and he really likes Lightpath. He is based in ABQ and I think he has gotten to know the company well. He's been buying Lightpath as well as the rest of the usual suspects, like jdsu, sdli, etc. Good taste in companies, nice guy. I didn't write down the name of his fund company, darn. He's not on the list in yahoo's institutional investor section.
I was amazed at how gracious Don and Bill were. I feel as though I monopolized their time to get the answers to your questions and I was made to feel welcome throughout. Leslie Danzinger was there and Don was going to introduce me but by the time we got around to it, she was gone. By the end of our conversation, almost everyone had already left.
Mr. Richter came over with punch for Don and me and sat down for a few minutes. I feel kind of silly saying how impressed with everyone I was, but that's the way it rolled out. Richter gave me the feeling that I could trust him; Don and Bill relay that same kind of honesty. Richter and Don appeared to have a very good relationship, as though they can speak their minds and not put on any airs. Rodenstock stuck with Lightpath through the tough times (there was an allusion to that in the conversation), just as we did. That struck me as an important indicator of solidity in this alliance. Richter had flown from Munich for the ceremony and is on his way back tomorrow. The Hikari man is visiting Santa Fe tomorrow with Don and others. I didn't get to meet him as time ran out. Rodenstock is a 125 year old company (or thereabouts) and Hikari is a 40 year old company. The contacts and connections they must have...wow!
Finally, I relayed your message, Handsyr, to Don and Bill and they will pass on the goodwill. They were very appreciative of your words. Hope they are proud of themselves as the transformation of Lightpath over the last year is incredible. What a different experience from a year ago! I think we are in very good hands -- when you think of the challenges they had to meet and overcome. They could have just quit, but they didn't, and their tenacity is beginning to pay off big time for all of us.
Oh, how could I forget? The scoop on the parking lot is that there are 4 and they are full (they cleared one for the meeting today).
'night, everyone. K |
