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

To: Johnny Canuck who wrote (34745)	10/15/2001 12:44:35 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70712

ADTN cc: Results flat with Q2. Happy to show consistent results. Lost a full week of bookings followed Sept 11. Booking non-existent. Recovered to levels prior after. Sept usually the strongest month of the year. Inventory levels reduced. Reduced overhead expenses. In q3 reduced workforece 6 percent. Oct 1 implemented 7 percent salary reduction. Cancelled all bonus. Reduced expenses without incurring more job losses as a result. Will re-instate salary cuts when business picks up. Capacity 500 mil per year. Currently shipping 400 mil. Still profitable. Improving balance sheet. Chance to make market gains in current weak economic conditions. Currently gaining market share. In some areas faster than historical. Still believe in data com market long term. In 70`s saw correction that was a rapid as now. Market was smaller so it got little press. Future need to tramsmit data is not going to decline. Pent up demand and growing in ADTN opinion. Financials: Rev 95.5 mil HDSL-T1 46.0 mil down from 60 mil Q3 2000 System 32.2 mil vers 28 mil Y-Y, 27.6 mil Q-Q Total Reach 19.4 mil down from 39.3 in 2000 58 percent carrier 42 percent enterprise Intl 3.4 percent of total GM 44 percent down from last year, 46 last Q decline due to product mix, no one cause R+D 15.2 mil ver 12.2 mil Y-Y, 15.9 percent , higher than normal SGA 23.2 percent, down 2.7 mil from last Q, 25.6 percent last Q 1.3 mil vers 1.48 mil last Q in inteest income Tax rate down to 28 percent due to R+D tax credits. Q4 should be the same. 28 percent for year, vers 34 percent used before. All due to R+D credit. EPS 13 cents vers 54 Y-Y, 12 cent Q-Q DSO 63 days up 1 day Q-Q Guidance 60 to 70 days. Inventories 72 mil. Investments 121 mil Shares in Dialog 12.5 mil, 3.7 mil shares Cash increased due to inventory decrease 119 mil in cash and investments Q4 : Book and ship business, backlog has no meaning, Sales in Q3 about as expected, no change in activity in near future. Q4 flat with Q3. Q: Basis for Q4 guidance. SGA decline due to lower run rate or reversal of accured expenses. A: Decline all due to run rate. No extra ordinary write offs to date to reverse. SGA should reduce in Q4 in absolute terms. Economist indicating the trend will stay the same, so expect the sames since we are flat now. Customers have no visiblity either. Watching inventories and controling cost. Q: Impact of Sept 11 on bookings. A: Hard to tell. 7 or 10 mil lost. Hard to tell if that came back after Sept 11. Booking returned strong after, hard to tell if we got it back. Q: Q4 guidance conservative. A: Just stating what we expect with no change in direction. After spring we have been in a range and we have stayed in that range. Q: Tax rate 2002. A: Hard to tell. No projection on rev projections yet. Do not expect tax rate to be a high as this year. Q: GM factors. Going forward. A: No significant factors. Some mix issues. Hoping for 50 to 55 long term. NO factor to prevent that long term. Q: Carriers trending down. Enterprise going up. Will it continue. A: Difference in trend there. Not large or strong. Same, but some slow increase in enterprise. Enterprise tend to lead carriers in slow times. Enterprise no as volatile as carriers. Merge of carriers and reduction of companies increase volatility. Hard to say. Enterprise could continue trend or be flat. Q: Inventory at distrbutor for enterprise. A: Rev recognized when shipped to distribtor. Some customers receiving orders direct. All distibutors keeping inventories low. Q: Transition from G. HDSL A: Seeing very little to low activity in North Amer, also Intl. Leading market in Intl. Designed for Intl market. Shipments in Q. Mostearly interest in Asia-Pacific where there is no local manufacturers