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

To: Johnny Canuck who wrote (36758)	4/15/2002 11:22:27 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68065

ADTN CC [Harry:Missed first part of call.] Q: Split enterprise/carrier A: 60 per carrier/40 enterprise. Q: Doom and gloom outlook for enterprise? A: Jan/Feb was doom and gloom. Extremely poor this year. Looked like everyone went on vacation. Saw a pickup in March. Hard to tell trend given only 6 weeks. Q: Pricing? A: No change in enterprise or carrier. Q: Any significant DLC activity in Q? A: None to report. Had a DSLAM South America win. Shipped some product to Chile. Q: G.SDSL transition? A: Intl: Bacame shipment of FHDSL into asia in the Q. Technology is roubust. Primary for frame relay customers. Optimistic about the future. Domestic: Done see any movement. Slower market to change. Don't expect it to ever occur with ILEC's. Q: Digital business transport area down significantly, why? A: ISDN in a downward trend due to demise of CLEC's that were using the technology. Lines were leased from ILEC's. We supplied to ILEC's. In DDS area this is used in the accessing of frame relay networks. This is driven by IT spending and this is weak right now. It should be more stable than ISDN spending as IT spending comes back/ Q: Break out from ISDN versus DSS in segment? A: Don't know except DSS is larger part. Q: Uptick guided in spending. Seeing new oportunities or seasonality or uptick in demand? A: Mostly seasonality. Q1 always weak. Typically after Q1 we see an uptick. Q: See it continuing into 2H? A: Don't want to give guidance. hard to predict? Q: Opti3? A: Being accepted by open arms at 2 ILEC's. Through OSMIME in 6 weeks. OC3 multiplexer. First intro into SONET area. Expect good acceptance. It is a large market, but one that is slow to adopt. ILEC are typically slow. Taking 6 months to get OSMIME. We know the market is there. We know opinion of customers. We expect a full year to ramp. We expect a great ramp though. Q: Margins on Opti3? A: We expect them to greatly enhance GM. Competing products are long in the tooth. Have been on the market 5 years. Will add to bottom line on day 1 of shipment. Q: Pricing trends? Decline of unit prices Y-Y? A: ISDN/DSS not declining at all. Large market share. On carrier side transferred most of buisnes to Total Reach product segment. We don't see Total Reach going upm but maybe 5 to 6 percent decline. HDSL pricing is stable. We have been increase GM through cost saving. We expect new technolgy at end of Q2 that will help GM. Over next year RFQ's will drop pricing by maybe 10 percent. Hard to tell. In the systems areas maybe see a 10 to 15 percent. Historically these are about the same as normal. Cost declines should be offset by cost declines though. Q: Salary cuts in Oct? Will this continue? When restored? A: Still in force. We don't expect it to stay in force forever. 5 percent range of total Op Ex. Expect to reverse it some time by end of year. We will do so at earliest possible time. Need stable environment. Q: Intl Sales level for year? A: Too early to tell. 5 to 5.5 per so far. We expect it to go up. Sales team has ambious goal. Intl customers also have long test cycles. Q: DLC traction? A: They are buying it, but we expect a slow ramp. We expect it to be a more significant part of rev going forward. Q: DLC and DSLAM. what contribution of new products by end of year? Competition? A: Don't know right now. Numbers not available right now. Small line size DLC product are our competitors. Is not a DSC size product? Q: Missed question? A: We have done well IAD space. Tough segment. Only way to do well is to take share. We took share in Q. Q: Pattern for key customers? A: Point of Sales numbers of distributors, numbers 45 days behind. Some CLEC's in trouble. T not a problem. CLEC slaes 12 percent of sales. Q: Stockholders equity, why did it not change Q-Q? A: Due to unrealized loss on Dialog holding. Q: G.HDSL , any penetration in Europe? A: Focused more in Asia. Europe has suppliers that have strong govt support. Have only modest expectation out of Europe. Q: Cash flow from Op? A: 29 mil from Q1. Most inventory balances and receivables. Q: Competitive picture for enterprise market.Low DPN routers competitors. Nexus, DLINK? A: Competition is a barbell(??). Smaller competitors have actually decreased due to problems they have been having. CSCO the other competitor. Not seeing Nexus or DLINK in significant way. Q: Telco segment was flat, why given that others are seeing down sales? A: Market share gains due to new products. Hard work down by that part of company. Telco cap ex spending will bedown 20 to 25 percent, but our business in the operating side versus the cap ex side. Not in the long haul or big iron products. Seeing pick up in IT spending driving us. Every new T1 service and frame relay drop is ususually an order for us. Q: Winter not very severe. Did installation of new line as a result have an effect? A: Don't know. Construction jobs are really scheduled to completion in the fall. Anticipation is for colder weather, so I don't expect an effect. Q: T1 growth? A: Flat to up 10 percent. Q: CSCO competitor. Are they driving price down? IAD market effect? A: Don't know. Key person not on call. We don't see pricing pressure as very little product overlap. Q: ADTN made transition from selling older legacy type prducts to systems. What will ADTN look like in a few years? Any new trend? A: ADTN will do well. Hard to predict future. We will be large and stronger 2 to 3 years out though.

To: Johnny Canuck who wrote (36758)	4/15/2002 11:44:14 AM
From: j g cordes	Read Replies (3) \| Respond to of 68065

"most chip co's are not yet prepared to make the large capacity driven equipment purchases that typically characterize a recovery; believes shares may retrench if there is seasonal summer weakness or if end mkts for electronics continue to recover at its current slow pace. Banc of America believes that the recovery in end mkts will be modest and/or uneven, yet valuations of the larger semi-equipment stocks suggest that the "best of all possible worlds" is ahead" Couldn't have said it better, in fact I did a while back. I'm feeling the average investor as well as institutional managers aren't willing to commit long.