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Technology Stocks : Stratex Networks, Inc. (STXN) -- Ignore unavailable to you. Want to Upgrade?

To: Peter Ecclesine who wrote (1561)	2/2/2004 3:24:41 PM
From: Rob Preuss	Read Replies (1) \| Respond to of 1762

Hi Peter, Interesting question. Now that STXN has introduced the Eclipse product line (which is an "Intelligent Node Unit"... NOT a "digital radio"... see my post number 1552 on 6 January 2004), STXN has expanded its potential market and is also facing a new set of competitors. My impression (based on almost no research at all) is that the equipment from old-line manufacturers like Cisco does a good job terminating land-lines and handling other functions (like routing, multiplexing, cross-connect, bandwidth & speed control, etc) but the special needs of terminating wireless links are an afterthought with them (if they are handled at all). My guess is that the new Eclipse product from STXN not only puts wireless termination front and center... but that it also does a good job with land-line termination and with handling all the other functions. Importantly, it does all this in a single (2 rack unit) box for lower initial and recurring costs than the multiple (16 rack unit) boxes from the old-line manufacturers. But a superior product, while necessary, is not sufficient for STXN to compete effectively in the long-run. Customers who could place big orders will be wary of buying from a small-fry like STXN. They don't want to piss off their primary suppliers without assurances that STXN will be around in the long run, that STXN will have the financial where-with-all to stand behind their products when some SNAFU arises, and that STXN will be able to handle much larger order-flow than they've seen in the past. So I expect the big customers to show interest, to test products and to place some significant (but not huge) orders with STXN. The trust and order-flow will have to grow over time. In the interim, Cisco and others will not stand still. They will develop products better able to compete on features/capabilities and cost with Eclipse. So, as always, STXN will have to continue their R&D efforts and come out with even better next-generation products in the years ahead. One interesting question in this battle is how much of a barrier wireless termination/linkage is to the old-line guys. They may just ignore STXN for awhile since STXN's sales will still tend to go to customers who really want/need wireless links. Cusomers that don't need wireless links (probably still the biggest part of the network equipment market) may just say: "that's cute, but my regular supplier is coming out with a smaller cheaper box in a few months... I'll just wait for that." So STXN's initial impact on the Cisco's of the world may be small enough that the Cisco's of the world don't put much R&D muscle behind wireless connectivity. Maybe the Cisco's of the world will figure they can just buy their way into wireless connectivity solutions (rather than develop them) when their customers start demanding such features. What do you think about all this? Rob

To: Peter Ecclesine who wrote (1561)	7/21/2004 9:28:18 PM
From: Rob Preuss	Respond to of 1762

STXN Announces Q1FY05 Results Stratex Networks Announces First Quarter Fiscal Year 2005 Financial Results Wednesday July 21, 4:30 pm ET SAN JOSE, Calif., July 21 /PRNewswire-FirstCall/ -- Stratex Networks, Inc. (Nasdaq: STXN - News), one of the world's leading providers of high-speed wireless transmission solutions, today reported financial results for the first quarter of fiscal year 2005, ended June 30, 2004. Net sales in the first quarter of fiscal year 2005 totaled $46.0 million compared to $36.0 million reported in the first quarter of fiscal year 2004. Net loss in the first quarter of fiscal year 2005 was $8.0 million or $0.09 per share, compared to a net loss of $3.4 million or $0.04 per share reported in the first quarter of fiscal year 2004. Excluding a $3.6 million benefit related to the favorable resolution of a previously reserved legal claim, net loss in the first quarter of fiscal year 2004 was $6.9 million or $0.08 per share. Stratex Networks received $45.5 million in orders during the first quarter. The backlog as of June 30, 2004 was $58 million. "Eclipse shipments increased sequentially by 40% over the prior quarter with the introduction of new functionality announced during Q1. Customers are beginning to express a clear preference for Eclipse and are driving a rapid product transition process. Based on these initial shipments of Eclipse, we expect a significant increase in Eclipse revenue in subsequent quarters, reductions in demand for the lower profit margin products Eclipse replaces, and steady improvements in gross profit margin in the second half of the fiscal year," stated Chuck Kissner, Chairman and CEO. "This, in addition to very strong bid and proposal activity on Eclipse, reinforces our confidence that this will lead to improved financial performance for Stratex Networks." In June, the Company announced the second major software release for Eclipse. This release contains a number of key networking features, and is considered key to fulfilling the anticipated strong demand for Eclipse in the second half of the fiscal year. Also during the first quarter of fiscal 2005, the company exercised its option under its credit facility with Silicon Valley Bank to borrow $25 million as a 4-year term loan at a fixed interest rate. This term loan provides funds to support the working capital required during the introduction and transition to the new Eclipse product line. A conference call with company management will follow this announcement at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Investors are invited to listen to the call live via the Internet at stratexnet.com . Investors can listen via telephone by dialing 877-543-9372 domestic or 706-643-3737 international and entering conference identification number 8379415. A telephone replay using the same conference identification number will be accessible at 800-642-1687 domestic or 706-645-9291 international beginning approximately two hours after conclusion of the live call. The Internet link and telephone replay will be available for a period of two weeks following the conference call. About Stratex Networks: With headquarters in San Jose, California, Stratex Networks, Inc. is one of the world's leading providers of high-speed wireless transmission solutions. Since it was founded in 1984, Stratex Networks has achieved international recognition for quality, innovation, and technical superiority in delivering data, voice, and video communication systems, including comprehensive service and support. Stratex Networks, with its broad product offering and worldwide sales and support organization, is strategically positioned to serve its customers' needs in wireless high-capacity transmission technology. Additional information is available at www.stratexnet.com . Safe Harbor Statement: This press release contains statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including statements relating to the Company's expectations regarding customer preferences relating to, and future revenues resulting from, Eclipse; gross margins in the second half of fiscal 2005; market acceptance of the Eclipse; and the Company's future financial performance These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of significant risks and uncertainties including unexpected delays in the schedule for shipments of Eclipse, negative trends in the general economic condition of the worldwide economy, order cancellations, postponements in product deliveries resulting in delayed revenue recognition, increased competition, downward pressures on the price of the Company's products and services and the introduction of competing products and technologies. In addition, orders and backlog are not necessarily indicative of revenue in any future period. For a further discussion of these and other factors that impact the Company's business in general, see the information provided under the heading "Factors That May Affect Future Financial Results" in the Company's Annual Report on Form 10-K for the year ended March 31, 2004, filed with the Securities and Exchange Commission on May 27, 2004. [Formatted Balance Sheets in Next Message.] NOTES FOR BALANCE SHEETS To supplement the company's consolidated financial statements presented in accordance with GAAP, Stratex Networks, Inc. uses non-GAAP measures of certain components of financial performance, including operating income (loss), net income (loss) and per share data, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP measures are provided to enhance investors' overall understanding of the company's current financial performance and the company's prospects for the future. Specifically, the company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for, or superior to, GAAP results. These non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure.