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Technology Stocks : SDLI - JDSU transition -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (564)	3/6/2001 3:19:26 AM
From: pat mudge	Read Replies (1) \| Respond to of 3294

NUFO Conference Call, March 5, 2001 Ken Westrick Due to softening in US economy and slowdown in carrier spending we are lowering guidance to $170 to 190 million for FY 2001. 1Q will be 39 to 41M, vs. 9.8M, Q2 rev will be lower sequentially. Q3 will grow sequentially and then momentum will be back in space. Slowdown in components and test and measurement. Inventory build-up. Expect growth between Q2 and Q3. Slowdown gives opportunity to strengthen organization. We will emerge a stronger company. Strategy to drive to number one is still in place. We are taking measures to be more efficient by slowing rate of production in China and US manufacturing. We will retain upside flexibility for second half of the year. Will continue to hire qualified engineers and mfg engineering, sales, and marketing and business development. Will limit operating expenses. Working harder to close new accounts and bring out new products. Development projects remain intact. Insight on what correction means going forward. NUFO will emerge stronger b/c 1) very best technical minds --- we have an excellent image within the industry. 2) seeing system companies developing relationship with us. 3) funding is closed to private companies and well funded companies will get business. Q&A: Q: Cash balances at end of quarter? Will inventories be up? What about cash at end of year? A: We ended year with $485M in cash. Used $75M for JCA. So now have 410M. Will be in high $300Ms at end of quarter, probably $380 to 390M. Inventories --- will take action to reduce them in this quarter. We are cutting production. Q: Rev. down in Q3, should we expect same decline as this Q? A: First NUFO without acq. Had 34M in 4Q and we are saying $38M to 41 for current Q. Because of closing in mid-quarter we don’t get benefits of full Qs for comparisons. Q2 will be tougher quarter b/c customers are going through inventory adjustment. Q: Where are pushouts vs. cancellations? A: We see weakness in telecom space in general. Bulk is in passives. And bulk of that is with two customers due to inventory bubble because of systems company. No change in JCA products. Continuing to look strong. Back to cash reserves, we will end the year very strong. Q: Ability to adjust fixed costs? A: In terms of component cost level, China has lower labor rates, but material costs are a considerable part of the equation. Won’t put equipment in place until we see demand pick up. Q: Two customers were pushing out orders? A: Both in telecom and both passives. Q: Test and measurement area? A: Push-out is in product sold directly to customers and to OEM. Q: Any changes in passive prices? A: Haven’t seen that. But expect natural decline. Q: What about Q3 improvement? Where? A: Being conservative about those customers. Seeing new customers and new products. Inventory bubble a couple are working through, based on what we’re seeing, we think they will work through it in time we’ve stated. Q: Didn’t you just advice upwards? A: We did raise guidance from 150 to 241M. Q: What about insider selling from IPO lockup? A: In terms of insider selling, management team has seen little. Various principals with acquisitions have sold. They’re not officers and not deemed to have material information. Q: Rev. from new products in June quarter? Impacting uptake of those products and new customers coming on? A: Yes, we will see rev from new products next quarter. Some new products have seen slowdowns, but some haven’t. Have strong pipeline. Two new design wins are in solid shape. Q: How confident are you with new guidance in terms of other customers besides two who have pushed back? A: Visibility on Q2 isn’t good. Q3 and 4 will be stronger. Q: Who were 10% customers? A: Agilent, Corvis and Corning. Q: What quarter will you turn operating profitable? A: We had said based on 240M we could be profitable in both third and fourth quarter. Q3 looks unlikely now. First opportunity would be in Q4. Q: 31.3 gross margins in Q4. Will they be up in Q1? A: If we were to eliminate the lower volumes, JCA and Globe would allow us to increase our margins. Since we haven’t done analysis I can’t state which way the aggregate will go. Q: Because of lowered market cap, who will buy you? A: We’re always concerned to do the best for our shareholders. NUFO has tremendous opportunity as a stand-alone company. We build for the long term. As a company I’m excited about going forward. Storms will pass and we’re focused on building a great company. Q: What about pricing pressures? A: We have built this in already. We don’t see any further changes. Q: Where will you see pressures? A: Not so much in beam combiners. Not many do them. Q: What about update in manufacturing? A: [graphs are on website] This year we were planning on bringing on 150K sq. ft., we have occupied half now and most is equipped with equipment. Second half will be built out on lease-hold standpoint but at this pt we won’t be equipping it till we see demand grow. San Jose we are building out space for dev. Laps and production for tunable lasers and will continue because of the importance of that. Will begin volume shipments in Q4. Q: Demand for tunable lasers? A: Yes, things look strong there. Q: On beam combiner, Corvis has inventory bubble, do other customers want it? A: This goes into Raman. As we see broader applications we’ll see uptick. Q: Visibility on Q2? A: We feel comfortable with $38 to 41M range for Q1, but don’t have good visibility on Q2. Q: What percentage was tests in Q4? What mix going forward? A: Relative to Q4 number, appx. 30% test and measurement and 70% communications. JCA is actives. We’ll have more guidance in next conference call. Q: Why will 3Q and 4Q be up if you can’t see into Q2? A: Large number of products and customers in pipe for Q3 and Q4. Also a lot of strength from JCA for second half. Inventory is due to one system company and will take a few months to work through. Q: Visibility into actives, what about pricing pressures? Also international? A: Actives is data drivers and clock amplifiers, no pricing pressures. See international interest. Additional customers are sampling, these will turn into volume in later half. Europe is strong. We’re committed to taking aggressive actions to get us through this correction. When industry slowness is worked through we’ll see tremendous progress. lightreading.com