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Technology Stocks : Harmonic Lightwaves (HLIT) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (2562)	10/21/1998 9:51:00 PM
From: Hiram Walker	Read Replies (3) \| Respond to of 4134

Mark, a rundown of the conference call for anyone interested. These are my views and notes on things,not verbatum. TCI accounted for 20% of sales,Canada is improving substantially,and the Chinese are buying significant quantities of digital headend products,though they are moving slower than anticipated. The breakdown of sales was the usual mix, with one exception,digital products accounted for over 13% of sales for the first time. Gross margins were still under 40% at 38%,but that should be improving to the low 40's by the first quarter of 1999. R&D was up 23%,I think mostly due to New Media in Israel,which also impacted Marketing significantly which was up 33%. DSO was at 70 days, a little longer than I would have hoped for,and inventories were up 10%. The good news is the backlog is up pretty substantially. There are at least 6 cities with MetroDWDM from HLIT right now,and more on the way. TCI is planning on most of their upgrades to all of their cities being MetroDWDM. There are significant orders for MetroDWDM from TCI and other MSO's. They are shipping scalable optical nodes to Cox and TCI. The big news to me is that they expect orders from a telco by the first quarter,and that press release this week for the high powered Metrolink is for a telco. They have digital orders on 3 continents,they have current deals with 2 North American,and 1 overseas client for Digital Transcend systems. They only shipped to one major customer this quarter. DWDM uses low power 1550 nm transmitters,the high powered ones are to be shipped to telco's for FTTC applications. This sounds like is is either GTE or BellSouth ordering these to me,but that is pure speculation. They are expecting to be profitable in the fourth quarter,big backlogs,and more cost reductions from increased production. Things look really good,and this was the most upbreat conference call I have listened to in over a year for HLIT. The other thing of note was the number of analysts,I counted at least 5 maybe six analyst questions. Tim