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Technology Stocks : Osicom(FIBR) -- Ignore unavailable to you. Want to Upgrade?

To: BJ who wrote (8227)	9/5/1998 10:46:00 PM
From: Harlock	Read Replies (1) \| Respond to of 10479

Dense Wave Division Multiplexor equip makers: risk/reward ? This technology will grow. Can Osicom win some big contracts ? You-know-who, and you-know-who-else (CSCO, LU) will be entering the fray with CIEN, ALA, and a host of others. Can little Osicom (relative to CSCO,LU,NT,ASND et al) compete with the big boys ? The fact that DWDM is a new technology may help the "upstart" company if they really do have the metro market specific edge they say they have.

To: BJ who wrote (8227)	9/6/1998 12:27:00 AM
From: David Wise	Respond to of 10479

I had asked in a prior post about cost cutting. This was answered so thoroughly I didn't have to ask in the CC. The press release also addressed closing one office and releasing 40 employees. Additional cost savings are also underway. My point was that when you know sales of traditional lines are decreasing, and new lines have as much as an 18 month ramp-up period, why not cut costs that were tied to old lines? Unless staff can be immediately transitioned to new product line, some savings should be a given. It looks like they may also sell the facilities in China acquired through the Builder's Warehouse deal. This is my reading between the lines, but I think it's pretty clear. They are looking for excess cash in one or two quarters. If next quarter, it won't come from greater sales than expenses, but from sales of excess baggage. I should have asked for more clarification, but I'm guessing they plan to do some outsourcing of manufacturing. This is, after all, the trend from other big companies. If you can contract out the labor, you are not tied into a constant expense when a product line is being replaced. The facilities expense itself (payments, insurance, utilities, upkeep) can be eliminated by outsourcing manufacturing activities. This leaves a company more flexible when demand is not constant, but may gap up and then dwindle for a few months. Usually a company like Osicom will benefit from outsourcing even though there is now a middleman getting a bite. Again, I don't think outsourcing was mentioned, but if they sell the China facility, it seems obvious. This would also give us the growth capital/cash we need without additional borrowing or stock sales, which Par did say was the goal. I was convinced that they have some sound plans in place not only for continuing to exist, but to be able to grow their highest margin lines which will be financed to some extent by canibalizing from lesser lines that could be profitable for another entity. I was very glad to hear Par mention the goal of increasing cash position over next 2 quarters. Sell unprofitable or low margin businesses and reinvest into high margin lines. Avoid further stock issues and avoid further financing requirements. What a change we'll see when Osicom starts showing profits again (forcast for quarter after next, I believe - listen to the conference call). Also, next quarter is supposed to show revenue growth - another sign that our fortune is reversing. And that's with modest sales in GigaMux. If sales take off, we might even see a big profit next quarter. Remember, with just 7 million shares profits are magnified.