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Technology Stocks : PRI Automation (PRIA) -- Ignore unavailable to you. Want to Upgrade?

To: Sultan who wrote (512)	10/23/1998 1:15:00 PM
From: Beltropolis Boy	Read Replies (1) \| Respond to of 1214

commentary from thestreet.com. Oct. 23, 1998 Midday Musings: Analysts Lock Horns on Chip Equipment as Market Muddles Along By Aaron L. Task Senior Writer Chip equipment makers and dueling analysts Indeed, chip equipment makers were notably higher this morning, despite an announcement by industry leader Applied Materials (AMAT:Nasdaq) that it will take a fourth-quarter charge of $285 million, or 56 cents a share, resulting in a loss in the quarter. The 20-analyst consensus calls for operating profits of 2 cents a share vs. a gain of 49 cents the prior year. The charge was expected and Applied Materials was lately up 1.5%. Overshadowing the announcement, apparently, is a sector upgrade by BancBoston Robertson Stephens. Lead analyst Sue Billat upgraded Applied Materials, ASM Lithography (ASMLF:Nasdaq), Etec Systems (ETEC:Nasdaq) and KLA-Tencor (KLAC:Nasdaq) to buy from long-term attractive. She reiterated existing buy ratings on Novellus Systems (NVLS:Nasdaq) and Teradyne (TER:NYSE). Novellus was the laggard in the group, having recently turned fractionally negative after rising early on. Meanwhile, Etec was higher by 11.1%, KLA-Tencor was up 5.6%, Teradyne was higher by 3.7% and ASM was up 3.6%. Some chip makers were up as well, notably Advanced Micro Devices (AMD:NYSE) and Micron Technology (MU:NYSE), each higher by more than 2%. The gains were helping push the Philadelphia Stock Exchange Semiconductor Index up 1.3%. By comparison, the Nasdaq 100 was lately up just 0.04%. In addition to overcoming AMAT's news, the BancBoston upgrades were winning the war on the analyst front. Concurrent to the Robbie Stephens upgrade, Merrill Lynch issued a far more dour forecast on many of the same names. "We thing the sharp rally in semiconductor equipment/materials stocks is about to stall out," Merrill analyst Mark FitzGerald wrote this morning, suggesting the group could fall 20% to 25% from current levels. FitzGerald acknowledged orders are "close to trough" but said "valuations are at record levels when compared with previous trough valuations in 1996 and 1991." He also noted an absence of insider buying at the semiconductor equipment makers. In an interview with TheStreet.com, Billat of Robbie Stephens countered FitzGerald. "Companies like [Applied Materials] and Novellus have managed exceptionally well through a difficult downturn," she said. "They are much stronger from a standpoint of market penetration, product lines, and economies of scale [than at past trough points]. As the industry leaders they deserve a higher multiple, given the outlook going forward." As for the issue of insider buying (or lack thereof), Billat said: "In 25 years of covering this industry I have not seen that as a matrix." The analyst acknowledged the sector is "highly volatile" and susceptible to "some profit-taking along the way." Still, she recommends additional purchases on any pullbacks. "I think we've passed the trough and believe than an inflection point has occurred," Billat said. In a follow-up call, FitzGerald redirected the issue back to fundamentals. "I think we're close to a bottoming in orders but I don't see them picking up anywhere soon, especially if we get a significant slowing in European or North American economies," he said, noting Merrill Lynch economists are forecasting just that. He recommends investors sell into the ongoing rally. Moreover, lead times for semiconductor manufactures -- which measure the length of time it takes for orders to be delivered -- are only two weeks, compared with eight-to-10 weeks historically, the analyst said. "It's down because of excess capacity in the industry," he said. "You won't have sustainable improvement in profit outlook until lead times start marching out. That's the earliest clue the turn for the equipment companies is six months down the road and it hasn't happened yet." The analysts do agree a bottom has occurred. The main point of contention is when the recovery begins in earnest and if investors can (or should) wait before reinvesting in the sector. As Billat said: "Obviously we take a different approach [than Merrill] and it looks like the market is agreeing with us." For now, at least.

To: Sultan who wrote (512)	11/30/1998 1:44:00 PM
From: Beltropolis Boy	Read Replies (1) \| Respond to of 1214

Oct 13 1998 1:48AM EST It opens up the possibility of PRIA acquiring/merging with Promis Systems ... oh sultan, can you portend who will win the fiesta bowl for me too? very prescient of you. more details on the acquisition ... ----- PRI Will Buy Promis (11/25/98, 4:27 p.m. ET) By Staff, Semiconductor Business News Acquisitions in the wafer-fab software business continues to pick up speed with PRI Automation Wednesday announcing an agreement to buy Promis Systems, a Canadian supplier of manufacturing execution systems (MES) for semiconductor manufacturing. In a stock-for-stock trade, the acquisition's transaction value would be worth $48 million based on today's stock prices, according to PRI officials in Billerica, Mass. PRI's move to buy Promis follows Applied Materials' agreement to acquire Consilium, a supplier of MES software based in Mountain View, Calif., and another deal by Brooks Automation to purchase FASTech Integration in Lincoln, Mass. The acquisitions are part of attempts by semiconductor-equipment suppliers to expand their role in wafer-fab automation. Under its acquisition agreement, PRI will swap its stock for Promis' shares at about $4.29, as long as PRI shares remain within a specific average during the period prior to the closing of the deal -- which is expected to be at the end of the first quarter 1999. The ratio of PRI stock for each share of Promise was at 0.1691 based on Monday's closing prices. Promis also granted PRI a contingent option to purchase up to 19.9 percent of its common stock at a price of $4.29 per share. The option would only become exercisable if the definitive agreement is terminated in certain circumstances, according to the two companies. "The acquisition of Promis Systems significantly enhances PRI Automation's wafer-flow solution," said Mitch Tyson, president and CEO of PRI. He said the addition of Promis software to PRI's logistics solutions will let semiconductor manufacturers "further increase profitability by reducing cycle times, accelerating fab start-up, and improving manufacturing flexibility." Analyst Dan Hutcheson of VLSI Research, in San Jose, Calif., said the acquisition made sense. "PRI has been very clear about its vision of delivering complete factory-automation solutions, and the acquisition of Promis Systems supports that strategy," he said. At the same time, other market observers also said PRI was facing pressure to secure an MES product offering as Applied and Brooks Automation moved further into the fab software business. Promis was also being pressured because larger companies were becoming involved in the MES arena. "We believe this transaction is the best way to maximize value for shareholders and customers of Promis Systems," said Ian McKinnon, president and CEO of the Toronto-based MES supplier. "PRI is now extraordinarily well positioned to serve the semiconductor industry worldwide. ... Simply put, only PRI is able to deliver an integrated wafer-logistics management system that optimizes overall factory effectiveness." Once the acquisition is completed, McKinnon will become vice president and general manager of PRI's Software Division, which will be based in Toronto. He will be responsible for all of the company's software products and report directly to Tyson.