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Technology Stocks : Trimble Navigation -- Ignore unavailable to you. Want to Upgrade?

To: David who wrote (2177)	2/3/1998 1:24:00 PM
From: David	Read Replies (1) \| Respond to of 3506

Excerpts from NovAtel CEO interview on MSNBC business video: Mr. Spothelfer covered a number of subjects, including the size of the high end GPS market, which he characterized as having about a 30% growth rate from 1996-2000, in contrast to a 40% low end growth rate (with obviously much lesser margins) in that period. He commented "we're looking at about the $3 billion market in the year 2000 on the high end for . . . high-demanding systems." He mentioned Trimble, Magellan, and Leica as high-end competitors. Said NovAtel had been 100% OEM, but now was over 30% as OEM, under 30% in end user sales (surveying) and the rest in aviation. NovAtel was $5 million cash flow positive last year, he said, with $10 million in the bank and no debt. Because of tax loss carryovers, he thought they would be tax shielded for five years or more. Said they are putting 25% of earnings into R&D, and still expects a net margin of 20-23 percent. Said they had an overall 70% gross margin on sales. NovAtel has been selling surveying equipment through Nikon-US and, as posted earlier, has just signed up with Nikon-Japan. Product rollout there would be in June/July period. He didn't expect much of an Asian downturn in the high-end surveying market. Also noted that, while in the US surveyors had to turn over from optical systems to GPS, in Asia and the developing world they go immediately to GPS, which is easier to master where there has been less education among the operators. NovAtel is aligned with the German firm Zike (sp?) for surveying in German-speaking areas of Europe and in Eastern Europe. I thought the remarks were interesting for his characterizations of the high-end market and gross margin, which are probably equally true for Trimble.