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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Hassan Lakhani who wrote (5107)	6/12/1998 12:59:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 18016

Peppe -- ATM statistics from recent financial reports: <<< Recent FY and Q results: WAN ATM revenue in the fourth quarter of fiscal 1998 - led by the Company's flagship platform and the industry's best selling ATM system, the MainStreetXpressT 36170 Multiservices Switch ----- was more than double the level achieved in the previous year's fourth quarter. WAN packet revenue for fiscal 1998 was approximately 70 percent higher than in fiscal 1997. Q3: Revenue for the Company's ATM products achieved record levels again in the third quarter of fiscal 1998 - the ninth consecutive record quarter for ATM revenue. ATM wide area network (WAN) revenue was more than double the level achieved a year ago; the principal contributor to this performance was the MainStreetXpress 36170 Multiservices Switch, for which revenue increased by more than 150 percent year over year. Order intake for ATM equipment, driven principally by the MainStreetXpress 36170 product, increased by more than 80 percent compared with the corresponding quarter last year. Orders for the MainStreetXpress 36170 multiservices platform increased by approximately 125 percent compared with the corresponding quarter last year. Q2: The strong performance in WAN packet business was driven by the industry's flagship ATM system, the MainStreetXpressT 36170 Multiservices Switch, which also achieved record order intake, revenue and backlog again this quarter. Both order intake and revenue for this product increased approximately 50% sequentially. Orders received for the MainStreetXpress 36170 switch were almost six times the level achieved in the second quarter of fiscal 1997, while revenue was more than five times the second quarter fiscal 1997 level. There were 80 customers for the MainStreetXpress 36170 switch in the second quarter alone, including 24 new customers. The product has now been sold to more than 130 customers, including many of the largest service providers throughout the world. Q1: The strong showing in WAN packet business was driven principally by the industry's flagship ATM system, the MainStreetXpress 36170 Multiservices Switch, which also achieved record revenue, order intake and backlog again this quarter. Both revenue and order intake for this product increased approximately 40% sequentially and were more than triple the revenue and order intake levels in the first quarter of fiscal 1997. There were more than 60 customers for the MainStreetXpress 36170 switch in the first quarter of fiscal 1998 alone, including 12 new customers. The product has now been sold to more than 120 customers throughout the world comprising many of the world's largest service providers. >>>>

To: Hassan Lakhani who wrote (5107)	6/12/1998 11:54:00 AM
From: Doug	Read Replies (1) \| Respond to of 18016

Hassan: That rebuttal is logically correct. However because of the nature of NN's business, the evaluation of its revenue/income growth is more complicated. I shall try to present the problems of NN in a brief and concise way as I see it. NN is a Company that has a revenue of $1.6b that needs to grow both revenue and income by 20% annually. Currently 40% of its revenue is derived from circuit switching products.Due to superior technology, the circuit switching market in N.America and Europe is getting extinct. A shrinking market exists in Latin America and Asia. The balance of NN's revenue viz 60% comes from Packet Switching products. In the past NN had a commanding lead in this technology. With time , others have joined in. At this critical phase, Packet switching Sales has to increase by $0.3b and in addition make up for any shortfall in circuit switch Sales. If this shortfall is 20% (highly probable), NN has to make up another $0.13b thru Packet sales. Hence the targeted sales for Packet switching products currently near $0.96b has to be ramped up to $1.39b viz a near 40% increase. This will have to be maintained if Packet sales continue to decline. Historically such increases come when Companies present outstanding technologies and have superb sales and Marketing Staff. Nowadays,any technology lead is short lived. Since others also have similar products, it seems that the future depends on a quick expansion of Sales. If Sales to OEM's for Carriers and direct sales to O.E.M's can show increases, I am sure the market will reward NN. Currently whilst many may consider that the market is punishing NN, it may well be due to them making a more realistic valuation.