mark.
i found the following squawk box interview while stumbling along naz.com. given your innumerable informative posts to the INVX board, i thought i'd make a small contribution here.
note that if you prefer multimedia, you can launch the aud & vid replays here too:
mktnews.nasdaq.com\\www\nasdaq\news\msnbc\1998\12\21\NASDAQ_0950_17201.htm&usymbol=ESIO&logo=True&companyname=Electro+Scientific+Industries%2C+Inc%2E
for the record, i'm not an ESIO shareholder.
-chris.
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Electro Scientific Industries (ESIO) CEO Donald van Luvonne is surprised by the company's recent stock surge
CNBC - SQUAWK BOX
ELECTRO SCIENTIFIC INDUSTRIES CEO DONALD VAN LUVANEE
DECEMBER 21, 1998
ABSTRACT: Van Luvanee says that although the business is suffering from a weakened Asia, the company is gaining market share.
Mark: You know the components that make pagers, cell phones and computers work? Well, Electro Scientific Industries makes the equipment that goes into the machines that makes those components. Got it? Otherwise known as ESI, the company scoops up more than half of its sales from overseas, with Samsung, Toshiba and Hyundai electronics among its top clients. Last week ESI saw its second quarter earnings were better than expectations, but were down from year-ago levels. Shares jumped over ten points Friday to close at a new 12-month high of 44. Right now shares are down 2 1/2. Here to tell us what's next for his company is Donald van Luvanee, CEO at Electro Scientific Industries. Thanks for being with us.
Glad to be here, thank you.
Mark: You reported second quarter earnings 1.8 million, 16 cents a share, why have I got a version here that says that's better than you did in the year ago?
I think it probably is referring to last quarter, it's up 5 cents over 11 cents.
Mark: Sequentially, but year ago it's down considerably because like everybody else, you know, you've hit a problem here. But if one is an optimist and looks at the pattern of the quarterly earnings reports, one might conclude that one is at the bottom right here. What does one Donald van Luvanee think of that?
We clearly see that the business outlook is firmer, that I think anyone that plans on market conditions, saving you is in trouble. We've run our business at the levels we're at right now and shown profitability and cash flow, both positive over the last year, our sales are down from peak about 25%. But now we see that our customers have learned to live in what is a new environment now with the Asian financial problems, raw demand for PCs and wireless communication is good. Our business is broadly across electronics, not just semiconductors, many of our compatriots.
Mark: By the way, after reading your 10Qs and 10Ks, you break out sales detail very nicely and I wish that more companies would do, would be as forthright as you are in telling people how different sectors of your business are doing. Comparing the three-month periods and I don't think that's misrepresenting things, the six-month period also is at least in this trend, semiconductor yield improvement systems down a little bit. No surprise. Capacitor production equipment, down significantly from 17 1/2 million to 9.9 million. Laser fine-tuning systems up nicely, 4.9 to 6.2. Electronic packaging up 10.4 to 11.1. Vision systems down big, though, 10.4 to 3.3. So if you take the ones that have been generating the most sales, take the top four, three of those four are down. Is that entirely the economic situation? Or are you, is this disguising a loss of market share?
Actually, we have gained market share in all businesses. The markets have been down in terms of capacity additions, especially in the micro components, the capacitor business. The vision business, for those that follow the semiconductor capital equipment, Kulicke & Soffa is our largest customer, they're clearly down in volume. That's really market conditions. I would say on the other side, you mentioned the memory yield improvement business. The D-RAM business, although there's pricing pressure, there's more bits being shipped and in fact, we gained market share in that business, which is a new technology.
Mark: Is that what is referred to here as laser fine-tuning?
That is the memory yield improvement, dynamic random access memory is the primary product. The circuit fine-tuning business is an interesting business in that it operates in a number of different specific applications. So during market pressure, when people are looking for ways to make a dollar and sell product, that business, because it's highly customized for each application, tends to improve somewhat.
Mark: I can't resist asking you this question, because this is from the Red Ship Review of only about 6 weeks ago. "Trading in the mid-20s, the shares are full priced in the near term. Long- term we're maintaining our target of 45 a share, believing the company is solidly poised, 32 million in cash and equivalents. no long-term debt." You're already there or thereabouts. Are you surprised at the quick rebound of your stock?
I'm somewhat surprised at the movement. We believe that certainly at our lower levels over the last few months that the stock has been undervalued. We maintained profitability, we've had none of the massive restructurings that many of our compatriots talked about. But the 10-point rebound is a long way to go. We do know that we have some new investors, some new long-term investors, so we're delighted with the shareholder mix but it moved pretty rapidly.
Mark: Sir, thank you very much for enlightening us, we appreciate your taking the time.
Thank you, glad to be here.
Mark: That was Donald van Luvanee, CEO at Electro Scientific Industries. |
