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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: brent gephart who wrote (11915)	2/4/1999 9:04:00 AM
From: backman	Read Replies (2) \| Respond to of 90042

PAIR presentation and discussion at Montgomery conference: NationsBanc Montgomery Securities Technology Conference The NationsBanc Montgomery Securities Technology Conference is being held this week in San Francisco. Two hundred nine of the country's leading technology companies are making presentations to buy side analysts at the Ritz-Carlton Hotel through Thursday. Briefing.com is attending the presentations. Here are notes from some of Wednesday's presentations. Comments in the bulleted lists are paraphrased from the presentations. Briefing.com comments on the presentations are presented after the bulleted lists. Company Presentation Notes: AMD, PAIR, CSCO, EXDS, Venture Capitalist Panel Advanced Micro Devices (AMD) Originally scheduled to present on Thursday, at 8:30 PST, AMD cancelled their presentation today, without explanation. An AMD presentation at next week's Goldman Sachs conference in New York was also cancelled. If an explanation is given at the conference today, Briefing.com will post it on the Story Stocks page. PairGain Technologies (PAIR) The PairGain Technologies presentation was made by the new CEO, Michael Pascoe, and CFO Charlie McBrayer. Company has been HDSL leader, with over 1 million lines installed Entire focus of company in the future will be on broadband access Believe demand for ADSL will boom in 99. Low cost is driver, $39 rate for ADSL now available in some areas PAIR is making a big bet on ADSL Will transition technology to packet and cell Have a technology advantage because PAIR helped develop the Open Standards Has goal to drive international sales from 15% of revenue to 25-30% Revenue growth in 98 was flat. Until sales grew at 30%, but severe pricing pressure drove down revenues 34% (HDSL segment of business). Gross margin decline in 98, pricing pressures Some margin improvement in 3Q99, due to cost reduction in chip manufacturing New Strategy for 99: make tech transition to cell/packet switch, push Avidia product Avidia: Mr. Pascoe stated that he joined the company because of the potential of this product. Avidia is a switch edge device, multiple service delivery over ATM, IP, frame relay, has 2-3 times the port density of any other competing product Over next five years expects ADSL growth to be 290% CAGR (compound annual growth rate), and expects voice to occupy only 15% of network traffic Current Product Revenue Mix: HiGain (HDSL for Central Office) 61% Campus (HDSL for corporate environment) 5% PG (lo-end HDSL equipment for smaller teleco) 26% Megabit Acess (HDSL/ADSL for CPE) 2% DSLAM/ATM (Multiplexer: takes multiple DSL traffic and puts it onto single ATM pipe) 6% Decline in T1 pricing, due to falling T3 prices, will increase demand for T1 (HDSL) products from PairGain Briefing.com commentary: PairGain is caught between two conflicting forces, strong rising demand for equipment, and strong pricing pressures. Pricing pressures usually benefit larger players, cost reduction will be a key area watched by analysts. Recent declines in gross margins are probably of the most concern to institutional investors, but the new CEO made a positive impression. Some investors may be looking at PairGain as a possible rebound play. Montgomery analyst Alfred Tobia's report on PairGain states "Stock price already includes potential for negative margin ramifications resulting from upcoming bids." In other words, investors who insist on companies with ever increasing gross margins have already dumped the stock. If PairGain can improve the margins as unit sales increase, its valuations should increase. The key factor will be cost control, and Mr. Pascoe seems fully aware of that. sound similar to who..? (as always, nice job, tim) david