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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: EnricoPalazzo who wrote (51250)	5/6/2002 4:40:49 AM
From: akmike	Read Replies (1) \| Respond to of 54805

Hi Ethan, "Do you know why cash flow from operations has been so negative of late? Any reason to expect this to turn around" Inventories were expanded to ramp the ENEL contract (from 6-10 mil.) receivables went from 10-29 mil. This will correct itself as the revenues gain and inventory and receivables steady. Finances are strong with no funded debt and one year's plus of cash in the bank. " The italy thing is certainly good news. Do you expect similarly large announcements in the US (nothing wrong with foreign markets of course, but I find american ones a bit easier to understand)?" U. S. penetration of the utility market will lag Europe and Asia because of more fragmentation here and the dialogue with the various regulators. The U. S. market has started to develop in industrial and commercial applications and in transportation. "Do you expect competition to eat into sales of the LONworks products? In what way is the technology protected from competition?" Competition comes in different forms. Echelon's protocol is an "open" platform but they manufacture proprietary hardware and software implementations of their standard. These are protected by around 90 issued or pending patents and where appropriate, by copyright. The chief competition today comes from the closed systems from legacy manufactures such as Johnson Controls, Trane, Siemens. Microsoft may become the longterm competitor (especially for consumer devices) with its announced "simple control protocol" SCP. It is believed, however that Echelon is years ahead at the present time. Cheers, Mike