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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Starlight who wrote (9267)	3/2/2001 8:35:32 PM
From: John Carragher	Respond to of 10309

Excerpts From Wind Ri ver Systems Inc. Conference Call Dow Jones Newswires Following are selected excerpts from a transcript provided by StreamingText Inc. (www.streamingtext.com, 703-326-8221) of Wind River Systems Inc.'s (WIND) conference call to discuss its fiscal fourth-quarter results. The operating systems consulting firm reported better-than-expected operating net of 19 cents a share, a penny above Wall Street consensus estimates. Speaking on the company's behalf is Tom St. Dennis, president and chief executive; Michael Zellner, chief financial officer; Jerry Fiddler, chairman of the board; and Curt Shacker, vice president of marketing and business development. Executives discuss guidance for fiscal year 2002: ST. DENIS: First, for fiscal year 2002, we expect revenue to grow 30 percent as we had guided before, and that puts revenue for the year at $570 million. We expect operating margins to grow by 40 percent during this year, over FY '01 to 14 percent for FY '02. And the focus there is to continue to grow operating margins faster than revenue. Earnings per share for the year should be in a range of 68 to 70 cents. And revenue for the quarters in FY '02 should follow the traditional distribution, beginning with about 20 percent in Q-1. And based on that, our guidance for Q-1 reflects a revenue of $116 million for Q-1. Earnings for the quarter are expected to be six cents per share with a fully diluted share count of approximately 81 million shares. You might note that comparisons to Q-1 FY '01 are difficult now between Q-1 FY '01 and FY '02, because of some of the year-end effects at the merger with ISI, as in fact their fiscal year ended in the middle of our fiscal Q-1. We also had some unusual gains from the sale of stock in Q-1 FY '01. So there may be some difficulty in those comparisons. ZELLNER: We haven't provided guidance around capital expenditures in the past and don't plan to at this time. It's not a major portion of our cash. We are in, we think, a very favorable position at $350 million of cash and cash like - cash and cash like securities or items. So we believe we have the flexibility to do things we need to do in the future. We were cash flow positive, as I mentioned, this past quarter. And so we feel like we are in very - we think our balance sheet is very strong that way and have no concerns in that regard going forward. On spending and quarterly margins: ZELLNER: Going forward, we will continue to focus on improving operating profits as a percent of revenue year-over-year. I would expect our quarterly margins for fiscal year 2002 to follow our historical patterns, with Q-1 lower than prior Q-4 ramping over the course of the year. ST. DENIS: In the next year, we plan to invest over $100 million in research and development to further extend our products capabilities, as well as introduce new technologies. Executives discuss the effects of the slowing economy on customers and on the company: ST. DENIS: Certainly this environment is a challenging one, but we believe that it is going to provide both challenges and opportunities for Wind River. The current slowdown in the tech sector is undeniable, and capital investment is down in several major areas. During times like this, the major capital equipment suppliers in the telecom, datacom, and other industries look to reduce costs, they look to outsource those areas of their business or products that can be transferred to reliable suppliers, and then they drive new product development even faster than it was driven before. In many ways, Wind River couldn't be positioned better. We are a key component of that new product development cycle, and as Jerry just mentioned, companies are spending upwards at two-thirds of their R&D budget in the software development area. So, in that kind of environment while manufacturing slows, new products drive ahead. SHACKLER: As you might expect, over the last since about Q-2 of 2000, the total number of deals funded by the VC community has dropped about 30 percent, which is a pure reflection of what has happened with sort of the dot-com companies. What's interesting, though, is what we're able to do with that. In particular we can figure out which ones would be opportunities for Wind River, either in a customer sense or a partnering sense. ...the percentage of Wind River opportunities has risen in line with the falloff in the (phonetic) opportunity such that the portion of that universe that would be applicable to Wind River has actually remained pretty flat or even gone up a little bit. So I think you can say that out of that, there is kind of a shift happening within the VC community maybe away from some of the former dot-com types of players to more the infrastructure type companies, the semiconductor companies and the things that are more in line with Wind River opportunities. On revenue mix: FIDDLER: I don't think that there is anything meaningful in the mix between this quarter and previous quarters. Some of the service projects tend to close at different times, and they could end up impacting revenue one way or the other. We had some higher product sales in certain areas. So I don't believe that it is reflective of anything other than kind of a normal variation there. We continue to see a strong demand for the services side of the business. As you know, we did invest in a facility in Europe this quarter.

To: Starlight who wrote (9267)	3/3/2001 12:37:21 AM
From: dday	Read Replies (3) \| Respond to of 10309

FYI, re shorting..... An exchange can only short shares in a type2 account (margin account). If your stock is in type 1 or cash account, the stock cannot be hypothecated (lent). There is a limit to how much stock can be hypothecated---140% of your debit balance. For example, You have a margin loan (debit) of $100,000. Firm can lend $140,000 of stock in the type 2 portion of the account. One stock can be lent or many different ones. Total not to exceed $140,000. At my clearing house, I see the short positions reflected by code on every position. Any broker can call and find what stock has been hypothecated in any account. He can also request that specific stocks not be lent out. I would not lose a lot of sleep over this issue. IMO, the more they short my position the better I like it provided I am comfortable and confident of the fundamentals. Regards Bob