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

To: Yin Shih who wrote (2627)	7/23/1998 4:32:00 PM
From: David	Read Replies (2) \| Respond to of 3506

Good summary on the conference call. I was also impressed with the amount of questions and the higher level of energy in this call. The last couple sounded like everyone was sleepwalking through them, This time, some of the outside world crept in. I think the Yen problem is more problematic than the Asian markets that make up ten percent of revenues, since it seems that Leica and Japan Radio Corp. (car nav), for instance, were providing price pressure on TRMB even outside of Asia, due to the exchange rates. Charlie Trimble made a point of Leica's advantage in putting Magellan in the red. I will indulge myself here and report the good news out of the call (we all need some cheering up): In the agriculture market, Trimble said "we're moving into a dominant position," with Rockwell leaving and Ashtech having left six months ago. In the timing market, he said that Trimble is moving from a number two position into the number one position over the next 12 to 18 months, and that market analysts would agree with this. (There was no mention of who is number one, but I suppose it could be Datum.) He said that the company had "rejuvenated" the land survey market (with the 4700 and 4800 series) and that GIS is doing "very nicely." The Beijing office, opened in June, is the one bright spot in the Asian market, and is expected to surpass this quarter's goal of $2 million in revenues (with $1.5 million in orders already received.) He was also pretty emphatic that the problems in the aerospace division in Austin, while still not completely under control, showed a lot of good progress between April and June. (April sounded like a disaster, and I suspect there have been a few layoffs in Austin to reduce overhead while they work through inventory.) In response to a challenge as to what he would tell discouraged long-term stockholders, Charlie Trimble said it would be a real shame to get out and miss a positive move. "Competitively, we are in an incredibly better position than two years ago. We are definitely winning the long term race. There will be some nice announcements over the next quarter or two."

To: Yin Shih who wrote (2627)	7/23/1998 4:57:00 PM
From: Bill Day	Respond to of 3506

Yin, I got the same impressions you did. Here are a few additional notes about the CC: Charlie said the aerospace margins were already improving and that total gross margins should be 53% in 12 to 18 months. Agriculture and construction were up 118%. Rockwell and Ashtech are out of or leaving this area and Trimble is clearly number one. Timing was up 47%, and Trimble expects to be the market leader in 12 to 18 months. Smaller backlog, due to much quicker turnaround times. This should make it easier to balance manufacturing to demand. Backlog is already up due to the introduction of the 4700. Customers holding off buying until it came out may have hurt sales this quarter. The problems are overhead and manufacturing costs, as well as currancy exchange rates. The office in China is already paying off. They did not seem too optimistic about the car navigation or handheld markets. I agree that they are still trying to take a long range view of growing the company, but unless they can learn to even out the earnings, the stock price will continue to suffer. (Although, in this business, it may be harder to manipulate earnings into a smooth line than some-Charlie mentioned the "lumpiness" of defense milestones.) Trimble continues to disappoint me (my wife says "get rid of Trimble", and I keep telling her it's cheap, and has a good future), but as Charlie kept saying, they are in the best position regarding their competitors, ever. Bill Day

To: Yin Shih who wrote (2627)	7/24/1998 9:59:00 AM
From: arun gera	Respond to of 3506

A lot of new analysts at this conference call - or they just spoke up. The analysts are probably drawn by the lower valuation. And there was a lot of "kicking of tires" at the conference. Questions were more related to management objectives rather than which GPS markets are picking up. Just some comments at the numbers: Land survey was flat - Obviously Japan did not help. Topcon deal did not make a significant difference. And when is the effect of Japan's approval of RTK going to help sales? Also, postponed sales due to Trimble 4700 introduction. The Land survey sales have been stagnant for a while. The run rate should be increased to $25 M per quarter. How can that be accomplished? Big improvement in Europe - Who is in charge there? Get more managers of that kind. Europe is of course Leica's home turf. So, a remarkable performance even prior to the introduction of Trimble 4700. What are the chances that this spectacular performance will hold next quarter? Or was it due to a lumpy order that came through in the second quarter? Down in Asia: Understandable downfall in Asia. Some loss in car navigation market. Too difficult to judge whether Trimble's plan of action is working in that market or not. AVL, Mobile Communication: What is happening there? Why should it be down? Why this over-reliance on AMSC? This market should be picking up. And it is a huge market with a lot of room to grow. Trimble has announced so many new products in this market. Are these not addressing the market? Who is in charge here? This should be a growth business, it is a productivity improvement tool, part of transportation logistics. And there is increased attention being paid to supply-chain planning in large corporations. Software and components: Hit by Geotek. Less competitive in the Japanese car navigation market. I think it is a fundamental problem, not just a dollar/yen problem. I don't think car navigation is coming fast enough. Europe and US are not significant enough markets. Also, no more new players to sign up deals with. Software and components is going to be dependent on sales in the timing/synchronization market. Timing sales in the last quarter were probably very small in spite of a 47 percent growth rate. I expect timing sales to increase to about $5-8 M a quarter. Hopefully software components sales would then move to $12-14 M a quarter. Aerospace: The growth has stopped. The growth that came with Honeywell alliance and CUGR seems to have have reached its peak. Trimble has been trying to pose as an avionics company. Is that really succeeding? How are Terra products selling? What is up with the Trimline avionics suit. Trimble has reached Avionics revenues of second tier avionics companies, say like Canadian Marconi, Interstate Elctronics, Universal Avionics etc. It is definitely creditable. Now, can they run with the big guys - Allied Signal, Honeywell, Rockwell, Smith, etc. That is a tough challenge. Should Trimble even try to pursue that market - non-GPS avionics market? Marine: Marine should be up for the next two-three quarters due to GMDSS. GIS: GIS growth seems to be slowing down. Agriculture: Agri is obviously coming off a low base. But Trimble has definitely impressed in that market. I have seen it coming and have indicated so in my older posts. This is a huge market in terms of numbers. Will be a fundamental tool in a farmer's arsenal. Promising. Military: What is happening with the Lockheed alliance on "smart bombs"? Is that the military project that is going to be more profitable in the next phase? Arun