FIBR CC Notes Part 3:
Winning contracts on product, not price. Margins actually improving in this economic environment. Great positioning for the immediate and long term future.
Lakefront Partners?
Capacity issues?
Was originally a worry for Q3-4. Now think can manage thru that steep level of growth. May have to do larger outsourcing by Q3.
capacity problems in 3rd & 4th Q. :)
3rd or 4the quarter might be challanged with production capacity...too many orders...hense Mark Thurman!!
Some customers sceptical about all the graceful features Sorrento's equipment has......want to see it in action.
question as to why carriers are testing our optical switch, technology or?
Xin says not just the technology, but a business decision due to scalability and modularity. I think he's trying to say sorrento offers a good dollars and cents solution and is a sound product choice for compatibility and against future obsolescence (my words).
just got disconnected. good call. calling it a day.
everyone have a great evening.
I lost some due to net congestion.
AWESOME CC!!!!, IMO.
I'll bring the best to the top.
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Q: Joseph ... Take a moment to differentiate your product from
your competitors?
A: Our product allows the customer, the service provider, to provide
a service to his end user, for which he recieves revenue, with a
minimal investment. Example, we can provide a service with one
fiber, our competitors require two. EPC. allows service provider to
provision services in real time at a very attractive cost point. We
also enjoy a proven product with proven reliability which is easy to
configure and which can be expanded gracefully, without taking our
customer's network out of service.
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Xin - blah blah blahditty blah. Heeeere's Jim
Jim Dixon - This has been a good quarter. Good growth in revenue
and margins.
(Joe?) Armstrong -
Revenue - 14.5 million. up from 10 mill prior year, which included
Entrada. If you do Pro- forma, it was about 6 million in the prior
year.
Q to Q 19% increase
Meret up 6% from prior Q
Gross margin up 2% to 34% -- due to increase of revenues which
amortizes the fixed cost better. Something about materials cost
Reduction in operating expenses. Implemented a sound plan to provide
sequential .. Operating expenses were $10 million vs. $15 million
in the prior quarter. [Joe- Holy cow, this is going to affect the
bottom line. Maybe that's why the interest]. The sales expenses and
engineering expenses have increase G&A reduced by $2.5 million,
primarily due to old one time charges.
Net loss - operating loss 5.7 million vs 12 million in prior quarter, reduction by
50%.
P&L income statement, solid plan
Revenue - domestic 7.9 million international 40%, first shipment to
Asia, 16 customers, one new customer, 4%, going to order 9-10 times
more revenue next quarter.
5% customers account for 75% of the revenue.
Total 23 customers
accounts receivable rose to due high shipment volume in the end of
the quarter.
[... more financial stuff which I am glad to hear is being tracked]
One vendor stuffed the channel to Sorrento, $10 million. Negotiating
to pay on the original, spread out schedule.
Line of credit will be $15 million dollars.
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Jim Dixon -
Existing customers continue to purchase.
Top five customers
ATT (T) [I dont recall them saying that they were shipping to
Telegraph before]
Cox Comm.
UPC (UPCOY)
Duetche Tellecom
missed one
Gig, EPC, OC-192
Better product mix.
Narrowed the loss.
Managed to reduce the cash requirements on a going forward basis.
Other events:
Continue carrier trials. Interestingly, because of some delays of
some carrier purchase decisions, [those carriers are reconsidering us
instead of their traditional vendors.]
Steady pricing.
progess toward product milestones.
Teramanager has been deliverd for customer trial.
Terabeam - was in stealth mode - will be demonstrating full demo at
SuperComm - demo of GIG, EPC, and TERAMATRIX![!!!!!!].
Belgiacom in Europe. Westco in US.
Jeff did a road show. 15 presentations to a number of analysts and
investors. People seem to be listening to our story now.
Joe has secured the bank credit line for us.
Continuing to monetize assets.
Guidance: In this Era, in which we all seem to have surprises. We
can affirm the guidance for 2002. Tripple digit growth for 2002 over
2001. We are in an era of uncertainty. We do see revenue growth on
a quarter basis, gowing forward. We do see margin improvement going
forward.
Further out, it appears that... we have a number of significant,
pending contracts, that by the midpoint of this year, we should be
able to have good visibility for the rest of the year. We may be
able to look forward to a real backlog. [He is implying that he has
good confidence that they will land one or more big contracts, IMO.]
We may be able to be a source of financing ourselves for our
customers.
The carrier trials continue. Opportunities that we are optimistic
about.
Coverage is on track. [what the ####? it comes when it
comes, IMO]
When significant come on board, we will look at significant
financing, at terms that will be favorable to our existing
shareholders.
----------------------------------------------------
Joe -
Series A shareholders have requested to redeem the series A
shareholders. We do not have the funds. We will honor the Series A
agreement as funds become available. We have engaged an investment
banker.
----------------------------------------------------
Jim -
Subtle concepts involved with Series A. We are not allowed by law
and contract to disburse the funds to Series A. Very difficult to
digest.
----------------------------------------------------
Q: Paul Johnson - Robert Stevens CustA CustB
A:
CustA, this Q 34%, prior Q 19%
CustB, 20% this, last 2%
CustC, 10% this, last 20%
Q: Increased guidance, based on current engagements please flesh this
out.
A: Currently have choppy revenue. Q2 is still choppy. However, for
Q3, we may have more stable contracts with bigger customers. Those
carrier class customers have a more predictable appetite for
delivery. We only have one consitant customer right now.
Q: David Jackson, Morgan Stanley Dean Whittier -
A:
Joe: Cash flow, if we achieve our revenues, will be +$5 million [-$5
million? did I get this wrong?]. From
the balance sheet point of view, we have some issues with the payment
times. Going out past Q2, I see the cash flow significantly improve.
Jim: In regards to our RFP activity. I see more sincere interest on
the parts of the RBOCs. But the issue of upgrading from Sonnet
remains touchy. There are as many forecasts as there are experts. I
am not expecting revenue from Sonnet upgrades this year.
Xin: RBOCs are a strategic market and our products are positioned
and certified (being certified?) for that market.
Q: Joseph Salas? Take a moment to differentiate your product from
your competitors? What quarterly revenues to you need to achieve to
reach break even? What is your pattern of shipments?
A: We are repositioning to financial success. We are managing our
cash flow. We think about $30 million on a quarterly basis to be
cash flow even.
A: Pattern is hard to characterise. We have seen one delay. We
have pretty much seen customers buying and taking delivery. Saw
brief period in February where things got stale, but the back end of
the quarter was very strong.
A: Our product allows the customer, the service provider, to provide
a service to his end user, for which he recieves revenue, with a
minimal investment. Example, we can provide a service with one
fiber, our competitors require 2. EPC. allows service provider to
provision services in real time at a very attractive cost point. We
also enjoy a proven product with proven reliability which is easy to
configure and which can be expanded gracefully, without taking our
customer's network out of service.
Xin: Jim has covered it very well. Our customer likes our product.
It is practical.
... Drop out .... re-connect
Q: Dan ... Robert Bear -- Ciena w/ATT bodes well for space. Are you
able to comment on how many field trials and what kind of customers.
A: We have a number of trials, at least three. We have been in lab
trials over time with various carriers. We are reluctant to put any
names behind that. ATT's validation of the DWDM technologys is nice.
We are not clear what ATT is going to do with Ciena.
Q: As far as your addressable market, the metro, how big do you think
that market is?
A: We have been using a number of research sources. Looking to Joe,
we see a market size of access, transport, and switching in excess of
$5 billion in 2004. We have seen that number come out as high as $11
billion
Q: top three competitors ONIS, CIEN, NT?
A: We see NT constantly, due to their historical relationships with
the customers. We see Oni Sys regularly, We seem to see
Ciena very seldom, head to head.
Q: Series A, Options, Holders are large customers?
A: Series A are some customers. Allowing conversions of series A
into some other equity. |
