Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cerprobe (CRPB) -- Ignore unavailable to you. Want to Upgrade?

To: raefon who wrote (145)	4/24/1998 2:16:00 AM
From: Herschel Rubin	Read Replies (1) \| Respond to of 201

Nice to hear from you, Raefon. Did you listen to the conf call? The conference call lasted almost one hour. Here are some of the key points from my notes: After Randy Buness, CFO, covered financial stats per the press release, C. Zane Close, CEO said that although Q1 had a very strong middle of the quarter, there have been signs of a slowing -- which they view to be temporary -- in the first weeks of this quarter. "The reduction in unit volume is related primarily to the PC market inventory problems". He said the "slowdown should be no surprise - other press releases from other companies have also indicated a slowdown." And he assured that "We're not getting feedback that this is going to continue past Q2." Close said: CRPB's market share is 35-40% in the U.S. and 10-12% worldwide. When asked: Is CRPB continuing to gain market share? "Yes, we are." He also mentioned, "We're taking international market share in Europe & Asia. The European market is relatively healthy." --Sales at Compuroute were on target. --Sales at SVTR were down primarily because they're getting into the higher margin remanufacturing of probers, and this is the area experiencing a slowdown for Q2. There was also pricing pressure on the low-end refurbishing side. --"Some of Asian market is a bit off, but not significantly" --"OEM business has been an exceptionally good part of interface product line. Teradyne and HWP OEM revenues have increased." --The real trump card [IMO] of the Conf Call seemed to be the acquisition of COBRA PROBE card technology from IBM-Owned Upsys. Close said: "The great thing about Upsys [the acquisition] is that CRPB can continue development of COBRA PROBE card technology on its own." "One of the motivators [to acquire] was to allow us to have more control of the production of COBRA PROBE cards. We can standardize production. Also, Upsys has had limited production capabilities." [I got the impression they were pleased to have those constraints removed.] "The COBRA PROBE market probably within the next 4 years could take up to 1/3 of the total prober market. COBRA is becoming the FAVORED technology. It is really growing. There is only one additional COBRA CARD manufacturer and..." [I didn't catch that part in my notes, but the gist was that the other company is not very competitive]. "COBRA could have a positive effect by Q4 and a MAJOR impact in 1999." As Close said in the PR, "Based upon our research, the potential worldwide market for probe cards including Cobra Probe exceeds $450 million per year." Zane Close Conclusion: "We are pleased with our start for the year. Looking ahead, looks like a soft Q2, but we expect to end the year on a strong note. The ability to get control of COBRA has been a huge plus for us and it will be a key technology for the future." DISCLAIMER: These quotations are as close as I can reconstruct them from my notes and I believe them to be accurate. Do not make investment decisions based on what you see here. Call the company if in doubt.

To: raefon who wrote (145)	4/24/1998 2:47:00 AM
From: Herschel Rubin	Respond to of 201

Final Post tonight: Updated CRPB PE = 16.7 With the Q1 earnings, the PE (trailing 12 months) can be recalculated as follows: FY97 EPS was $0.96 Q1 1998 EPS was $0.28 Q1 1997 EPS was $0.17 -- Drop off Q1 1997 by adding diff to FY97 EPS --------------------- Difference ====>$0.11 -- So, EPS is $1.07 for the trailing 12 mos THEREFORE, the PE a/o today's close = $17.875/$1.07 = 16.7 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ FORWARD EPS ESTIMATE: --------------------- Q1 1998 EPS = $0.28 (actual) Q2 1998 EPS = $0.23 (my conservative est, Dow Jones News: $0.27 for Q2 Q3 1998 EPS = $0.32 (assume sequential growth over Q1 1998) Q4 1998 EPS = $0.36 (assume sequential growth over Q3 1998) ------------------- 1998 EPS est. $1.18 THEREFORE, FORWARD PE est. a/o today's close = $17.875/$1.07 = 15.1 Not bad for a company with a 25% growth rate. Note: This is an estimate. It is interesting to note that Dow Jones News Service - Professional Investor Report shows the recently updated Q2 1998 consensus estimate for 3 covering analysts as $0.27, which is sequentially lower than the just-reported Q1, but not by much. In the above analysis, a more conservative $0.23 was used.