Gentleman-The recent article in Forbe's that stated that Tellab's is making buggy whips and it's products are doomed to go out of existance in the near future. I find the article to be poorly researched, reaching inaccurate conclusions with some really dumb statements. Fixed print magazines like Forbes, are more likely a buggy whip product in today's society, especially when their head is busy running for office. More and more people retrieve more and more financial information and opinions from the internet,from the many financial TV channels.etc.
Remember that over 55% of sales of Titan are upgrades. Many of the future products are being cultivated and will grow and produce revenue just like it takes 5 years to get fruit from a newly planted apple tree. Our president has over 1 billion in stock and is only 60 years old and he is doing all in his power to make sure that Tellab's remains on top of the situation. Read his comments in the last annual report. To refresh our memory on new devopments in Tellab's I repit the last Q and A session at the last quarterly conference.
What does Tellabs do? Now there is a basic question. we live at the base of the
information age,where all sorts of voice,data, video,internet,info. etc. is to be
gathered,sorted,transmitted,massaged, globally for our infernal pleasure and Tellabs
makes some the best egt. To help us do this job, involving some of latest technology
known to man,and because it's sitting on a $600 million nestegg with very little debt,
Tellabs can sort through lots of the evolving companies and buy or create
partnerships,with other leading edge cos. at will. Now Tellabs has some experienced
leaders that provide the critical mgt team decisions that help Tellabs make this kind of
progress.
Now boys I'm a aggie,and that's about as technical as l'm allowed to get. For a better
understanding of Tellabs go backwards 5-10 years and read their annual reports.
Now to the business at hand, here is my short summary of the conference call,4/20/98.
Four of the mgt. Team were on,Pres.Mike,financial guru Peter,N. Amer pres, Brian and
for the first time and holding his own was John Vaughn ,Inter. Pres.
Gross for quarter was 327 m.(Million),+33% from one year ago,Titan was
175M.+40%,Martis was 77 M. + 26%( off 8.5M.for currancy)and Echo 32M. +65%.
Net income was 68M. + 38 % from actual earnings one year ago or only up 8 % from
one year ago when you include the 20M profits then from sale of AFC stock. Now the
important thing is that the analysts had them pegged at .35/share , so Tellabs beat that
by 5.7%,and thus Tellabs jumped to 71 5/16 on 4/20/98. R and D held steady at
13.2% of gross.The summary by the mgt team said they were well positioned for 1998
year and very optimistic.The vote on CO. takeover will take place on May 12th with no
sweat. Bell Atlantic contract was a major coup.The Helsinski Martis mfg. Plant is
opening up,just in time. Optical networking projects with their various new products is
coming nicely,keeping in mind that 1-3 years are needed from when they were started.
Cablespan Two will be the subject of announcements soon, with about 25M sales in
'98.The emerging IP networks,have created a whole area to apply Martis solutions.
Currency loss for '98 is expected to 17-18 M.due to strong dollar. Martis DSX will be
in 410 M. gross for year,up 45-50% when viewed in Finnmarks.Titan upgrades now
65% of business with new business at 35 % of sales.Translation, our smart sales force
works closely with our customers, gets them started with our products and as they get
hooked they find themselves needing our upgrades,which are costly devils.Mgt. team is
satisfied with W
DM progress as lead by our NY. Team, ook for some announcements in later part '98,
this will be a significant growth area.with about 20M gross in 4th ¬ '98 and starting to
take off in '99. Atm,gateway products will to ship in '98. Later in "98,look for
announcements on bandwidth mgr products ,very important since bulk of industry is
looking at total systems approaches.China is being cultivated with about 10M gross
coming this year. Echo at 32M is 70% based in USA,so buying CO. will greatly expand
our international sales. No sales of AFC shares this quarter, we hold 8-9% of company
and have developed a new relationship with technological exchanges with this hummer.
At Supercom show in 6 weeks, Tellabs will feature interoperability of our products,new
Titan 2000 features and new Martis features and Co. Level 3 operators,eg.25 alternate
service providers are a big source of our growth, as they use Tellabs technology to build
their future.There are over 2000 long distance providers, who think they can provide
better service than the old monopoly and they need the best egt. To try to do this. There
is a aggressive schedule for launching new products in '98,including major enhancements
to Titan 5500 and Martis products. Telmex selected Tellabs. John Vaughn new inter.
Pres had good responses.
Boy's the mgt team is experienced,with plenty of cash, and they are playing lots of
angles in playing with this fast growing international. Market,.that is changing rapidly
Let's rev up the entrys in this talknet.
VERY IMPRESSIVE DAVE DICKERSON
I REMAIN A LONG TERM BULL. |
