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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: Chemsync who wrote (20426)	9/15/2000 11:08:20 PM
From: P314159d	Read Replies (1) \| Respond to of 21342

As you all are aware, Virata is principal supplier to WSTL for network processors in the modem. (You're not? For shame, because it is in the PR and 10Q data, etc.) Virata posted a good estimate of the qtr already. How to use Virata data to determine the CPE sales volume at Westell: Last qtr VRTA shipped enough NPUs to cover the 350K modems WSTL shipped and provide the normal inventory ramp for the following the qtr. (this qtr). From the VRTA 10Q, WSTL was a $9.4m customer last qtr. From recent PR of VRTA, WSTL is a 12.4m customer (30% of 41.4m). @ $20 per device WSTL bought 470K last qtr and 620K this qtr. From the inventory reports of WSTL 10Q, you can arrive at an approximation for inventory control as follows: QTR : II , MS , IO (numbers in K) 4Q00: 10, 90, 30 1Q01: 30, 350, 150 2Q01:150, m , m/2.5 ---- II= Inventory In, MS= Modems Shipped, IO= Inventory Out, m/2.5 is Inventory ratio to sales The data is derived from a regressive analysis of the WSTL inventories and sales data and continually gets updated per qtr for sanity check. Solve for m: you get 550K units give or take based upon inventory control. You can also project an "n" for next qtr based on the inventory when it becomes available, but for now use the same ratio and you get 805, but expect a little lower shipment figure and you might curtail next qtr for about 700K. Another simpler way to arrive at a modem shipment amount is to use the 9.4 and 12.2 numbers and arrive at a 30% growth in sales given proper inventory control (although this scheme doesn't take in account the current growth rate). 30% increase from 350K is 465K. Thus use 465K to 550K for estimation and you average about 505K. Now create the model of the company and spit out the eps. I said the qtr was back-end loaded and this proves it to me. The 465K number equates to 11 cents easy. See ya in the 30s and remember the technique for next qtr, easy money. but it is sure to be harder next time!