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Technology Stocks : Ascend Communications-News Only!!! (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Kent Rattey who wrote (1498)	7/10/1998 4:50:00 PM
From: Duke	Read Replies (1) \| Respond to of 1629

Ascend Shares Rise Amid Optimism for Strong 2nd-Qtr Earnings Alameda, California, July 10 (Bloomberg) -- Ascend Communications Inc. shares rose as much as 5.3 percent amid optimism that the computer-networking company will meet or beat analysts' expectations for second-quarter earnings. Ascend, which is scheduled to report results Tuesday, rose 2 3/8 to 53 1/4 in late trading of 4.88 million. Earlier, the shares touched 53 9/16. Alameda, California-based Ascend sells equipment that lets phone companies and Internet providers transfer incoming calls onto the global computer network. As telecommunications providers expand their networks to handle growing Internet traffic, they are buying more of Ascend's switches that use asynchronous transfer mode, or ATM, technology to route data communications. They have the strongest ATM product line by far right now,'' said Michael Davies, an analyst at Punk, Ziegel & Co. who rates Ascend ''buy.'' Ascend is expected to earn 28 cents a share for the quarter ended in June, according to First Call Corp. 15:47:04 07/10/1998 Any redistribution of Bloomberg content, including by framing or similiar means, is expressly prohibited without the prior written consent of Bloomberg L.P. Any reference to the material must be properly attributed to Bloomberg News. The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.(C) Copyright 1998 Bloomberg L.P. BLOOMBERG, Bloomberg News, Bloomberg Financial Markets, Bloomberg Television, Bloomberg News Radio are trademarks, tradenames and service marks of Bloomberg L.P.

To: Kent Rattey who wrote (1498)	7/15/1998 5:03:00 AM
From: djane	Read Replies (2) \| Respond to of 1629

2Q98 ASND CC Summary from djane Mory comments No discussions w/AFCI. "No truth to rumors" $327M revenues. "Best quarter ever." 7.3% seq. growth $59.1M net income. .29/sh fully diluted [interesting that he didn't brag about 12.8% seq. growth] Book to bill over 1. Indicator of market/ASND momentum North America deregulation. CLECs as powerful agent of change and large customer group 1st to deploy xDSL, VoIP and SS7 RBOCs and ILECs facing competition and more deployments Backbone bandwidth need is growing exponentially Qwest, Level 3, WMB, AT&T, Frontier & GTE have selected ASND for backbone network North America (NA) market strong through 1999 Intl "increasing activity," but lagging NA deployments Customers evaluating new backbone networks Expect initial vendor acceptance in Q3 and through 1999 Rest of world is "mixed picture." Asia. China is major near-term opportunity Japan showed improvement in Q1-Q298, but remains real question mark for Q298 and early 1999 Latin and South America. See considerable activity, but base is small Remains optimistic about overall health of overall market Access switching Strong seq. growth in intl markets. SA and NA showed "some seasonally." Q298 was softer qtr for most larger ISPs following typical strong Q1. Q3 will be stronger as ISPs add capacity to meet Q4 demand "Strong reception" for MAX6000 new enhanced product and 56K modem software. Quick deployment by largest customers Continuing trend. Largest service providers to be larger percentage of sales. Continue market leadership. Dell'Oro (35.1%) and Dataquest (30.5%) show RAC share for Q198. Largest installed base of access ports worldwide Core Systems Quite pleased w/momentum and customer wins. 47% of revenues ATM strong growth and GX550 "strong contribution" NA, Europe and Japan strong seq. growth Shipped OC-48 optical networking interface. Allows interconnect directly to DWDM Backbone demand expected strong in 2H98 and 1999 ATM is backbone technology of choice for largest providers Core Systems will be growing percent of total revenues Enterprise Access seq. revenue decline 2H98 and 1999 Focus. SS7 and VoIP is key WCOM, AT&T, Level 3 and NTT. ASND is well positioned NA strong growth in 2H98 and 1999 Intl. 34% Q2 vs. 26% in Q1 intl is key to sustaining growth rate Competitors entering market are significantly larger than ASND ASND is well-positioned in marketplace Ashby comments 327.4M revenues. Access switching 1.3% growth from Q1 Core Systems 23.4% Enterprise Access -31.5% Service 15.2M up slightly NA 63%, down 4.2% Intl 33.7%, up 40.4% Access switching 42% of total revenues Core switching 47% Enterprise access 6% Service 5% Pleased w/access switching. Significant increase in intl MAX6000 well received. TNT was main rev generator in NA and intl Core switching strong demand. 23.4% seq. growth. GX550 well received Significant wins in Q2. 704M cash and investments up from 691M in Q1 $269M AR and 74 DSO (up from 72) 70-75 expected DSO. Inventory increase by $29M 3.6 inventory turns. Lower than expected due to new product intros and deferred revenues Inventory turns will increase in Q398 Hired 330 employees in Q2. Acceptable turnover. 1.4B revenue in 1998. 4.3% growth in Q1, 7.3% in Q2, approach 10% in Q3 and slightly higher than 10% in Q498 10% seq. growth is one of fastest in industry Major contracts ship over many quarters FY1998 $1.20 earnings estimate Comfortable with .31 EPS in Q3 and .34% in Q4 and $1.20 in 1998 25% operating income. "Best in class" FY1999 $1.60 earnings estimate Lower growth in early quarters and gradually increase Mid 30% revenue growth in 1999 1.9B revenue Gross margin (GM) slowly decline to 63% 14% R&D 19.% sales and marketing expenses 3% G&A 26% operating income 35% tax rate Analyst Q&A Session 1. Schwartz (SSB) asked about precise EPS guidance. Ashby said it's easier to forecast after Q2 and want analysts to remain realistic. [i.e., ASND is being conservative and lowballing the estimates.] Mory also said that SS7 will increase deployments of TNT and backbone network in 2 phases. 2. Johnson (BARS). Ashby said increase in deferred revenues and inventory mostly on access side, but he wouldn't give out the amount of finished goods. This revenue is put in "Other Assets." 3. Parmalee (First Boston). ASND said GX550 shipped to more than 10 larger service providers. Profit margins higher on access, then core and then enterprise access. 4. Woo (Thompson). Congrats on great qtr. ASND said hadn't seen 2 CSCO core switches [didn't get #s]. In response to question about CSCO, Mory said CSCO is a great enterprise company, but sell only routers in the carrier space. Mory said CSCO isn't a contender in the WAN space and has no product to effectively compete there. In response to question about NN 36170, Mory said it was 4 year old technology. ASND had new, state-of-the-art tech with density and speed required for new network. 5. AJ (Goldman). Ashby said GX550 revenue wasn't recognized until Q2 because it wasn't officially released until 4/98. 3 reasons for deferred revenues, including no release from final test, partial shipment, or recourse due to customer finance problems. 6. Raymond James analyst asked about RAC SS7 competitors. ASND said there had been a BAY announcement, but no deployments yet of product comparable to ASND. Mory added that ASND will add enhancements to announced SS7 product. 7. BT Alex Brown analyst asked about access pricing. ASND said there has been general stability in RA pricing. Expect more aggressive pricing in intl and a little in NA. Mory said intl pricing under a little pressure due to strong dollar. But, pricing cutting of competitors 2-3 qtrs ago didn't work. 8. Stix (Cowen) gave congrats for great qtr. He asked about GX550 testing cycle. Mory said new carriers test for 1-2 months and existing carriers with complementary uses test for 2-6 months. Stix asked about Asia and Europe breakdowns. ASND said intl was 33.7% of revenues, 13% Japan, 5% Asia, 15% Europe and SA/LA remainer. 9. Bellace (ML) asked about new products in Q3/Q4 and R&D priorities. ASND said there would be no new product platforms, but many enhancements to existing products, e.g., SS7 and VoIP. For example, customers are adding VoIP and modem cards to MAX4000. Largest R&D focus on software development. 10. Noel (H&Q) ask3ed about emerging vs. traditional carriers and NTT guidance. ASND said received large NTT order in Q1 and shipped it in Q1/Q2. Expect some follow-on orders in 2H98 and large order in 1999. ASND said CLECs are substantial piece of business and expect significant increase, but aren't more than 50% of revenues. CLECs are buying both backbone and access. 11. Erickson (DRW) asked about CLECs applications. ASND said voice, data, DSL and fax but not much video. 1st Sahara broadband shipments in Q2. Lots of interest and potential. Lots of RFPs in Q3/Q4. 12. Tobia (Montgomery) asked about inventory turns and deferred revenue. Ashby said it will be close to 5 by Q498 and greater than 5 in 1999. Deferred revenue will be taken in Q3 and majority is from the access side. 13. Armacost (Everen) asked about CSCO IP and ASND ATM market perception. Mory said Qwest and WMB are deploying ATM because it's only platform with QofS at this point. ATM will be the technology of choice. Sell GRF because some customers don't want QofS. Sell IP through IP Navigator or MPLS. 14. Martin (CIBC) gave congrats. ASND said price competition more at low end. DSL will help. In addition, larger ISPs care more about service and functions. ASND discussed European competition from Siemens and Alcatel, who have been selling to these customers for decades. ASND doesn't know what their win rate will be in intl. Mory said there would be some TNT-II deployment by late 1998 with SS7 functions, higher density and higher functionality. 15. Sagowa (Sanford Bernstein). Mory said ASND was not prepared to discuss the next generation GRF. There seemed to be a surprised silence before the next question. [Does anyone have an explanation for this?] Ashby said gross margin wouldn't decrease to 61% and would be stable at 63% and could go up. End of conference call

To: Kent Rattey who wrote (1498)	7/18/1998 11:23:00 AM
From: Kent Rattey	Read Replies (1) \| Respond to of 1629

Thirteen High-Tech Leaders Support Alternative Solution to Network Encryption Stalemate SAN JOSE, Calif.--(BUSINESS WIRE)-- July 13, 1998-- Ascend, Bay Networks, Cisco Systems, 3Com, Hewlett-Packard Company [NYSE:HWP - news], Intel, Microsoft, Netscape Communications, Network Associates, Novell, RedCreek Communications, Secure Computing, Sun Microsystems support alternative solution to win U.S. export relief Thirteen leading high-tech companies today announced support for a 'private doorbell' solution to the network encryption stalemate called 'operator action.' Ten of the 13 companies filed proposals with the U.S. Department of Commerce last week, asking for permission to sell strong encryption products abroad that use operator action technologies. An alternative to key recovery, the operator action model delivers a 'private door-bell,' not a 'house-key' to parties lawfully seeking access to data. Under the operator action model, information traveling over a data network remains secure and private unless a network operator is served with a legal warrant or court order. Once served, the network operator can access a network control switch that actively filters messages delivered over a private network or the public Internet. The solution allows customers to keep their private information 'private,' unless directed to disclose information by legal warrant or court order. While this effort represents a partial solution to the encryption debate, industry is committed to work together toward a complete solution. An Industry Solution Ascend, Bay Networks, Cisco Systems, 3Com, Hewlett-Packard Company, Intel, Microsoft, Netscape Communications, Network Associates, Novell, RedCreek Communications, Secure Computing, Sun Microsystems jointly support the industry alternative, which balances the privacy needs of individuals and businesses with the security needs of U.S. law enforcement. Today's announcement reflects the convergence of thirteen companies around a technology concept that addresses the complex issue of accessing encrypted information over data networks. The filings request broad export relief for a range of networking products including most firewalls, VPNs (Virtual Private Networks), and E-commerce products. Industry leaders have been working to define an operational standard since October 1997. ''As the global public network becomes increasingly important to both business and consumers, resolving issues such as exportation of security technology become more and more critical,'' said Mory Ejabat, CEO of Ascend Communications. ''We fully support this effort as we believe it meets the needs of both the public and private sector.'' ''Bay Networks and other American companies have developed the world's leading encryption technology,'' said Dave House, chairman, president, and CEO of Bay Networks. ''Our overseas customers want that technology and the privacy that goes with it, and this solution will allow us to export our technology, instead of handing the business over to foreign companies.'' ''As the Internet continues to drive economic and job opportunities worldwide, it's important that customers feel safe doing business on the web,'' said John T. Chambers, president and CEO of Cisco Systems. ''This industry proposal extends the same privacy rights we enjoy today to tomorrow's digital world, delivers a market-driven solution our customers want, and secures a competitive advantage for the U.S. high-tech industry.'' ''U.S. technological leadership depends on a reasoned resolution to this debate,'' said Eric Benhamou, chairman and CEO of 3Com. ''Continued evolution of converged networks will require balancing the needs of businesses and government agencies concerning data security.'' ''We are committed to providing our worldwide customers the network security that they demand,'' said William Larson, CEO of Network Associates. ''The industry is presenting an innovative solution that meets both market and government requirements for network layer encryption.'' ''Relief from export controls is an industry wide matter,'' said Jim Barksdale, president and CEO of Netscape. ''We believe the ''private doorbell'' feature, if successful, will demonstrate that industry and government can work together. Further relief, however, will be necessary in the near term, if US vendors are to remain ahead of their overseas competitors.'' ''This solution represents a real step forward for U.S. encryption policy,'' said Eric Schmidt, CEO of Novell. ''At last, we have a market solution that meets the needs of consumers, corporations, law enforcement and national security.'' ''RedCreek believes that the adoption of this proposal is essential to the healthy development of the market for products that address business use of the Internet,'' said Tom Steding, CEO of RedCreek Communications Inc. ''This international market has in the main been denied to U.S. companies. Particularly for VPN companies, our ability to compete internationally will be significantly restored by its adoption.'' ''It is vital for our customers to be able to implement technology on a global level, without country-specific restrictions limiting their use or effectiveness,'' said Jeff Waxman, CEO and Chairman of Secure Computing Corporation [Nasdaq:SCUR - news]. ''Security is a top priority for multi-national corporations and this action, which attempts to find a solution, will help move the promise of ubiquitous security to a reality.'' Critical Differences from Key Recovery The proposal is a compelling alternative in the network space to key recovery. Protecting privacy and due process rights, the industry proposal delivers an important solution for securing data over a public or private network. In seeking government export approval, the companies made no modifications to their products or encryption technology. The companies however offered to restrict sales to some foreign governments and militaries, and to continue to comply with existing U.S. Department of Commerce regulations. Note to Editors: Cisco, Cisco IOS, Cisco Systems, the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. in the U.S. and other countries. All other trademarks mentioned in this document are the property of their respective owners. A copy of the white paper on encryption export is available at the following URL:http://www.cisco.com/warp/public/146/july98/2.html Editor Note: Conference call with industry executives July 13, 1998 11 am - 1 pm PDT (888) 527-4180, ID : 8903 -------------------------------------------------------------------------------- Contact: Ascend Eric Warren, 510/747-6683 eric.warren@ascend.com or Bay Networks Jeff Ferry, 408/495-2419 jferry@baynetworks.com or Cisco Systems, Inc. Doug Wills, 408/527-9475 dwills@cisco.com or 3Com Peter Ruzicka, 408/326-5853 peter_ruzicka@3com.com or Hewlett-Packard Company Katie Hogan, 650/858-3760 chogan@ccipr.com or Intel Corp. Bill Calder, 503/264-5669 bill.calder@intel.com or Microsoft Mark Murray, 425/936-3306 mark_murray@microsoft.com or Netscape Communications Peter Harter, 650/937-3329 pfh@netscape.com or Network Associates Nathan Tyler, 415/975-2223 nathan.tyler@cbpr.com or Novell Inc. Raymond Nasr, 408/577-8254 rnasr@novell.com or Secure Computing Corporation Ken Montgomery, 408/918-6120 ken_montgomery@securecomputing.com or Sun Microsystems Anne Little, 650/786-6702 anne.little@corp.sun.com or RedCreek Communications Inc Richard Farana, 510/745-3951 rfarana@redcreek.com --------------------------------------------------------------------------------