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To: Thean who wrote (3095)	9/18/1998 12:42:00 PM
From: The Ox	Read Replies (1) \| Respond to of 14427

VTSS's earnings growth for the next fiscal year will be lower due to an increased tax rate. This year their tax rate jumped from 10% to 20%. Next year it jumps to 30% (it may jump higher, like 35%, I'm not sure the exact jump). This will slow their earnings growth temporarily, but not their revenue growth. The biggest issue for me, when I look at VTSS as a potential long investment, is that they are guiding the street to a 12% to 15% sequential quarterly revenue growth. That figure is almost astounding. Management has more or less stated that this type of revenue growth will continue into the foreseeable future. They are ramping up their new Colo Fab which came on line this year. So far, they have seen less then $10 million in production revenues from this new facility. Recently, they stated that this plant could produce 400/500 Million in yearly revenues. How far into the future this looks, I'm not sure. I think VTSS has an edge over companies like MRVC for a number of reasons most importantly, they supply products to multiple segments of the high tech industry. If the telecom sector slows, then they can focus on datacom and ATE, or vice versa. The biggest issue is to watch the gains that competing technologies show. VTSS's management has stayed on top by producing high end products with reasonable yields while their competitors have struggled with similar attempts. VTSS has stated they will shift into whatever technology becomes the most viable. Their design team is highly respected. I would guess they know exactly what the competition is up to and how soon they may have to adjust their current strategy. As we all know, at least those of us who follow this thread, the world markets are having difficulty. Going long on any company could be trouble at this time. The same holds true of VTSS, although I would bet that VTSS will fare much better then many companies if the world economies continue their meltdown. This is why I held onto 20% of my VTSS stock. They are a company I have faith in. Their track record is impressive to say the least. Thean, take a good look at the press release in your link and compare the companies on that list to those on the recent Fortune list of companies with top eps growth rates. You will find VTSS on both, #29 in your link and #4 in the fotune list. This shows the incredible job VTSS's management has done turning revenue growth into earnings. Too bad more companies can't do the same. All of the above from a VTSS bull.... Michael

To: Thean who wrote (3095)	9/18/1998 2:19:00 PM
From: bw	Respond to of 14427

Took a short position in UK @ 37 5/16. Will hold through the weekend on this one. Very negative story on '98 - '99 earnings forecast: cbs.marketwatch.com With the Clinton tapes and full report out on Monday, this coming week could be a little rough on the long side....