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Politics : RAMTRONIAN's Cache Inn -- Ignore unavailable to you. Want to Upgrade?

To: Tom Caruthers who wrote (14140)	9/16/2008 5:35:41 PM
From: Tom Caruthers	Read Replies (1) \| Respond to of 14464

Collins Stewart (7/25/2008) RMTR reports inline Q2’08 results -Ramtron reported total revenues of $15.5M (+8.6% q/q), which was slightly below our estimate of $15.9M and above Street estimate of $15.3M. Product revenues were $15.1M (+9.1% q/q), which were also slightly below our estimate of $15.5M. PF EPS was 4c, which is inline with Street estimate of 4c and below our estimate of 5c. Additionally, GM declined to 54.2% (-40 bp q/q). By regions, Americas represented 28% of sales at $4.4M (+32.2% q/q), Europe came in at 31% of sales at $4.8M (+34.7% q/q), Japan represented 15% of sales at $2.3M (-26% q/q), and Asia/Pacific represented 27% of sales at $4.2M (-2.3% q/q). Total unit shipments in the quarter were 21.3M (+29.1 q/q) compared to 16.5M in Q1’08. The average ASPs declined to 71c from 84c in the previous quarter. ASPs were lower primarily due to ramping shipments of lower ASP custom FRAM components for printer cartridges. -Despite inline quarter, RMTR raises guidance While June revenues in the quarter were roughly inline with our expectations, RMTR raised its guidance for the full year to +26-29% y/y revenue growth vs. +24-28% y/y previously. RMTR indicated that it expects that drivers for growth in 2H’08 will be from the ramp of 2Mb/4Mb FRAM. In the quarter, Ramtron ramped 3 custom parts in its printing business and anticipates ramping at least 1 additional custom in volume before the end of the year, which we believe will allow computing revenues to grow sequentially in 2H’08. Additionally, RMTR has already begun shipping HD FRAM in the quarter in volume and while we expect this to contribute more meaningfully in 2009, we anticipate that shipments of 2Mb/4Mb will contribute ~$2-3M in 2H’08 revenues. Ramtron also indicated that it continues to see strong interest in HD FRAM, indicating that it is currently tracking ~30 design-in opportunities in areas such as gaming, energy equipment, and motion controllers. - Defective FRAM remains an overhang We anticipate that until resolution is achieved regarding potential charges associated with defective FRAM components, this issue will continue to remain an overhang to the stock. Ramtron did not provide additional details regarding this issue on its earnings call other than impacted units were less than 100K. While no specific timeframe for resolution was provided, we are anticipating a 1-time charge of ~$1M to COGS in Q3’08. -Fine tuning estimates. Maintain HOLD. We are nudging our estimates for Q3’08 down slightly, as we are assuming that the ramp of HD FRAM will be slightly more back-end loaded. We had previously had modelled Q4’08 down sequentially, but given the anticipated momentum from HD FRAM shipments, we anticipate that Q4’08 revenues will be slightly up q/q. As such, we are lowering our Q3’08 estimates slightly to $17.5M/3c from $17.6M/4c previously. Our Q3 estimates include a $1M to charge in anticipation of defective FRAM restitution expenses. Conversely, we are increasing our estimates for Q4’08 to $17.8M/6c, from $17.1M/4c previously. Our 2008 estimates increases slightly to $65.1M/18c from $65.0M/17c previously. We are also nudging up our 2009 estimates to $84M/27c from $83M/26c previously. While we have increasing confidence that revenue growth for RMTR will begin to accelerate in 2H’08, we recommend that investors remain on the sidelines and await further clarity into the resolution associated with Ramtron’s defective FRAM issue. Maintain HOLD.