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

To: John Carragher who wrote (3470)	11/8/2000 11:14:38 AM
From: Wyätt Gwyön	Read Replies (4) \| Respond to of 3951

I think so. He said CSCO is a buy at 50-60 PE, implying a price of about $22, I think. His implication for SDLI is probably also about half the current price. So I would guess he is a value guy.

To: John Carragher who wrote (3470)	11/10/2000 10:39:07 AM
From: pat mudge	Respond to of 3951

Tycom Analyst Conference Call, Nov. 9, 2000, Part II The Q&A was very difficult to follow as they had no microphones in the audience. I finally gave up and went to bed. I've written to the company to ask for a transcript and I'll certainly post if they respond. TeraWorks: New venture within Tycom. From Latin, terra firma --- land-based capability for what Tycom has undersea. It is a fully owned subsidiary of Tycom. Designs ultra long terrestrial systems. Have technical capabilities as well as manufacturing. Have broad experience in deploying long haul systems. Core capability of TeraWorks is its ability to do turn-key ULH systems. Millions of fiber already in the ground. Most is dark. Need to go out and characterize and engineer the route. TeraWorks does system design with equipment and plant available. Have management needed. Can also manage networks. Key to success is core of engineers and researchers. All professional have knowledge of leading edge technology and know how to apply it to ULH systems. Have Tycom’s financial backing. Full access of intellectual property and other resources. Have access to Tycom’s manufacturing facilities. Organization: started this April, all except head are from outside. 7 PhDs and 12 Masters. All have experience with leading vendors. Based in New Jersey. Use Exeter mfg in New Hampshire. Will produce tunneling equipment for terrestrial use. Also will mfg amplifiers needed for long haul systems. Current state of art in DWDM systems on land: Most are based on technology that can go 600 kms. Good for voice-centric networks. These have been put together with tech. that can go that long. But if you had a system that could go coast to coast, you would have to stop 19 times for regeneration. That’s costly. Also hard to provision new services. Coast to coast, direct, would be difficult. Teraworks Extreme changes all that. It allows ultra long haul transmission. Uses high-performance optical equipment developed for undersea. Can do 7500 kms without any intermediate regeneration. Extreme products can do 10 gig of 64 wavelengths at 7500 kms. Margin advantages over any other system. FEC capabilities. In-line amplifier, terrestrial based put into repeater huts. Includes advanced EDFAs and Raman technologies. New for terrestrial. Also borrowing from undersea an all-optical maintenance strategy. We will use all-optical maintenance the same as under sea. No serviceable parts. With 100 cascading amplifiers this is very important. The reliability aspects are critical for ULH. Product benefits. 7500 kms with regeneration. Can add channels at the end of the tunnel. No need for intermediate equipment. No regeneration sites. Allows carriers to provision new services quickly. Only need to work at the end of each system. Huge embedded base of fiber in ground around the world. Some is old. Need to know what’s there. We manage the whole project. Complete turn-key solutions. ULH market is emerging in US and around the world. Internet traffic is becoming the dominant way to communicate. It is no longer voice. Internet traffic is not business dependent. It is global, not local. Connection distances are getting longer. From 600 kms to 7500kms. Long haul is 3.bill and will go to 8 Mil in 2004. ULH will be significant as time goes on. The market will open up as sytems become available. Carriers will put in multi-layer networks. Super-pops are connected with ULH transmission systems. Connected in mesh architectures. Optical cross-connects will be used. Only supplier with a product being manufactured today that can go 7500 kms on old fiber. We are the lowest transport cost per bit. Lower cost b/c of no intermediate regeneration. Value derived from technical achievements. Also interoperability with other vendors’ equipment. What differentiates us? · We are an enhanced start-up. Many years of experience in the fiber field. We have experienced parent in Tycom. · We start out with technology leadership. · Manufacturing already established. · First to market with ULH for 3000 to 7500 kms. TeraWorks uses leading edge fiber optics technologies. Tycom Financials: TeraWorks is terribly exciting. In Tycom models, no revenues included from TeraWorks, but all the expenses are. We were told by analysts that they want more information. 4Q and FY2000 were extremely strong. All sales from third-party business. 4Q drove 588M in revenues. 2001 set at .58 per share, guided up another 6cents to .64. R&D and S&M will go up. CapX, $200m last year for traditional equipment; Also 111M in TGM system. Next year another $200M in factories, ships, test equipment, also another $2.4billion for TGM. Tremendous increase in demand and see that going forward in future. We are being conservative with our model. Feel very confident in rev. projections for next few years. Pricing: Some say it is evening out. That’s true, but we included 25 - 30% price erosion, y/y. Seeing major customers buying capacity when they might have done their own before. Larger chunks than traditionally. We feel confident in our sales targets. Sales targets are going up. Estimate $5 billion in sales in 2004. Q&A: Q: How does increased guidance break out? A: Mainly from third party business. $2billion next year. Q: TeraWorks products shipping? A: Shipping several phases. They will be in actual systems in 2001. Revs in 2001 and strong revenues in 2002 from TeraWorks. Q: Terrestrial systems traditionally are 2500 to 3000 kms. TeraWorks are ULH. Q: What are you seeing? A: We’re seeing who will be the major players. We see a lot of carriers are moving to on-demand capacity. Q: Alcatel and Fujitsu working together? A: They had to get together to compete with Tycom. Q: A: Never say never about someone coming into this space. LU will come in but it will be awhile. NT will be there. Haven’t seen them in the marketplace. Barriers to entry are tough to overcome. Q: Seeing larger orders than anticipated? Is this a trend? A: We’re seeing STM1/4,/16s not seeing them wanting this. Wanting wavelength fiber pairs. Q: What is order of magnitude of savings between current systems and yours? A: Could be up to tens of millions of savings. We can do for $30M what costs someone else $60M. Talking to people all over the world about these systems. We don’t have debt. We’re funded. We are a better value than others. We don’t have to low-ball prices to get business. Seeing strong demand. Adding demand as it comes along. Generally at 15% of capacity at outset. Carriers want to buy more than they currently need. They want to be ready when they need it.