Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Johnny Canuck who wrote (36080)	2/5/2002 4:51:56 AM
From: Johnny Canuck	Read Replies (2) \| Respond to of 68217

AVCI CC Q4 rev of 9.2 mil ver 10.2 mil Q3 loss improved in Q due to better GM and cost saving measures. 2 - 10 per customers T and WCG. TSR deployment in Washingston DC. 9 th city. Expect more going forward. WCG amended agreement. Bought 2.7 mil. Trials in Q. Some in certification stage. Expect quotes going forward. Add new trial for SSR. See strong interest. Expect more trials going forward. Expect SSR rev by Q2 2002. Tripled rev base last year. Deployed at T, Chunway, and France Telecom. 3 major product release during year. Added MPLS software release. Only vendor with scalable solution on market. Guidance: Bullish long term, due to new IP services and broadband deployment. Near term, seeing just in time spending. Most vendors deferring spending to later half of 2002. Seeing 80 to 100 percent traffic growth. No Q1 guidances as a result. Cap efficiency will drive demand for products going forward. Substantial barriers to entry to market: Financial: Rev of 9.2 mil versus 8.8 Y-Y down 10.7 percent Q-Q loss 16.3 mill or 33 cents, improved Q-Q beat by 1 cent Higher GM and reduced operating cost. Rev from 4 customers. T and WCG > 10 per Service rev greater than 10 percent in Q. GM 34 percent. Operating cost 20.9 mil, down Q-Q Operating cost down in Q1 further, Interest income 1.5 mil, cash 172 mil Head count 300 vers 400 Dec 31,2000 Cash 164.4 mil on Dec 31,2002 Cash burn in Q 15 mil. 5.8 mil payment from WCG in Q. WCG bought 2.4 mil in Q4. 5.8 mil is deferred. Cash burn in Q1 20 mil. Have cash till 2003. DSO 28 days , down from 67 days Q3. Target 60 to 65 days. Inventory 8.1 mil, down 8 percent, turn 3 times. AR 23.5 mil, deferred 8.2 mil, 2.4 mil deferred services and 5.8 WCG Payables 15.3 mil, to contract manufactures and obsolete parts 3.1 mil long term debt for computer leases, write off in next 3 Q's at 1 mil per Q. Q: Q1 expect slight improvement on Op Ex? GM up over 2002? A: Total Op Ex and depreciation will be flat relative to Q4. Op Ex will come down a bit. Offset by depreciation expenses. GM will trend upward. GM driven mainly by volume. No comment due to lack of visibility. Q: Deferred Rev in Q3. A: 3.2 to 4 mil. Q: Strategy for edge? Software? New products? A: No edge exposure. Mainly in core and some core metro and aggregration segments. Looking for 3 bil in 2004 ver 1 bil last year in this segment. Q: Chasis ver line cards. A: No broken out in past at these rev levels. Traditional customers are more in line cards. Others are chasis and line cards. Q: Mix shifted more to line cards this Q? A: yes. Q: 2H pick up in 2002. Where? What type of customers? A: Outside USA. Asia showing signs it will pick up earliers. Europe showing more promise. USA growth driven by broadband growth. Need change in regulatory environment to accelerate growth. Q: Long term investments, any equities? A: All cash. Long term assest are more than 1 year maturity. Required to report as long term assest as a result. Q: Top 10 customers, rev total percentage A: No comment. Q: Contribution on SSR in Q? Outlook in 2002? A: Response in industry good. Existing customers interested as they can use it further out in the network. Seeing some customers return to evaluate product after. One PTT trials. Traditionally trial 9 to 12 months. Market uptake very strong. Q: WCG, will they not return as a 10 per in Q1? A: Extended contract out to 2003. 5.8 mil payment will be placed against future purchases. No idea if they will be 10 percent next Q. Q: Looking at trials, decision making time frames? A: Deployments in 2H 2002 and early 2003. Decisions will be made in spring and summer. Will have to move due traffic growth. RFP issues in advance of decision cycle favours our scalability. Q: Of 14 trail mix of TSR and SSR? A: 1 new SSR trial, a few new trials last Q. Total: 2/3 TSR .1/3 SSR. Q: Customer base, which are deploying MPLS, VPN ver traffic engineering. A: Most doing traffic engineering now, but more plan to implement MPLS this year. Q: Any private router companies getting into trials ? A: Not see any in RFP. Lot of work getting the silicon done, software completed and their Inter-op trials done. See a few years of lead time. Heard rumors of some silicon problems for the first go around. Q: Cap Ex? A: 5.5 mil Q: Cash flow from op. A: negative 11 mil. Working cap up 1.5 mil Q: Cash burn for Q1, up above 20 mil. then down after that? A: Yes. Below 80 mil next year total. Up in Q1 due to doing better in Q4, WCG payment effected Q4 results. Q: Rev level need for break even? Was 35 mil? A: In ball park. Few million saving in op, but mid 30's. Q: RFP activity. Any pick up? A: No dramatic pick. Increasing. Nature of RFP changing dramatically. Focus on scalability and reliability. Q: Q account? A: Expect evaluation to push out to the middle of the year. [Harry: In general terms, this is not as negative as I expected. The pick up in Asia and Europe reinforces what we have heard in other calls. The traffic growth looks to start to force the issue in the later half of the year, provide the economy does not contract further. It looks like the USA really needs a regulatior resolution for any real spending takes place. It is not longer a cap ex issue or a demand issue.]