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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (32293)	5/16/2001 11:35:23 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70270

SCMR CC Notes: -A/R down 48 mil to 46 mil -DSO's up 19 days to 77 days due to more international shipments and customers asking for more flexible terms -DSO will be in the upper range of the 60 to 90 days going forward -18.9 mil of income due to interest on cash and cash equivalents - 240 mil share outstanding in the Q, expect increase of 4 million next Q -Cash and equivalents 1.3 billion down 98 mil from last Q -Cash break down: 295 mil cash, 448 mil short term securities of 1 year of less, 595 mil in securities of more than 1 year -recorded a 165.8 mil re-structuring charge in Q: 1) 4 mil to layoff 132 employees 2) charge to consolidate sites 3) 137 mil in write off of assets and inventory due to termination fo SN6000 and bi-directional SN8000 feature - end of Q3 had 986 people -1/2 R&D, 1/3 sales and marketing -Q3 vendor financing, had 68 mil draw down of the credit facility -no new customers included in the credit facility -credit facility still 200 mil total -Inventory at 45 mil down 21 mil QtQ -turns at 4.3 down from 4.8 -deferred rev down 16 mil to 9 mil -international sales 50 percent of sales -Market segements transport, switching and edge -transport accounted for bulk of sales -transport includes SN6000, SN8000 and SN10000 -LDCOM, Vodaphone and 35 networks using the SN5000 -three 10 percent customers -12 customers shipped to -WMB just under a 10 percent customer -a substantial part of the way through the 400 mil WMB contract -expect WMB to decline going forward -restructuring will save 13 to 15 mil per Q Guidance for Q4: - rev 50 to 60 mil due to low visibility, long acceptance cycles at ILEC's, and component yield problems (ASIC)effecting 256 by 256 fabric switch -expect yield problems to be resolved next Q, volume shipments late in Q -Gross Margins 23 to 28 percent due to lower volumes and fixed costs -Op Ex down 13 to 15 mil due to Q3 restructuring -Interest income in 13 to 15 mil range due to lower interest rates -expect to pay no taxes in Q due to operating loss -Q4 up 4 to 5 mil shares -No Y2002 guidance due to low visibility -Still seeing component shortage in Vixels (Sp?), qualifying second source now -guidance includes 360 networks reduced Cap Ex announced yesterday -Definition of metro market more broad than some companies -sales of SN3000 and SN8000 are for the metro market -long haul distance between cities is unique to North America -looking long haul and metro as equally important markets -expecting more traction on SN3000 going forward Overall impressions: -management had a hard time differentiating their product from competitor like ONIS and CIEN -no mention of better feature sets etc .... -would have like to have seen some emphasis on their network management software as discriminator or at least a mention of the need to deploy new software and services as a potential engine of growth -no shift in focus to metro market which is still growing -no mention of total number of trial or just new trials