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Technology Stocks : Spectrum Signal Processing (SSPI) -- Ignore unavailable to you. Want to Upgrade?

To: JP who wrote (2223)	2/13/1999 5:53:00 AM
From: nord	Read Replies (3) \| Respond to of 4400

MY perspective on where we "Spectrum" is at this point in its short history. The company celebrated its 10 anniversary in 1998. It has gone from a small [few person] reseller of others wares to the largest dsp systems company by all parameters... for pure dsp solutions The company has built a very talented engineering team centered around the 4 targeted vertical markets. They have developed in house the ability to make ASIC's a very necessary component to complek integrated parallel systems Spectrum has developed a software division by doing this they have coordinated the in house talent to work on different cores and applications programs as a unit rather than on each product in a vacuum ie shared memory [human] on the software side Spectrum has increased the productivity of the unit by eliminating redundant non essential support ie overhead. The software division can pull individuals or teams to solve difficult problems and then allow each to go back to another application the ability to build ASIC witness Hurricane that cuts flowthrough and allows TI to offer a cheaper better parrallel system on a board the tooling algorithm library and the experience they have in house in soft radio, motor contol, surveillance, and wireless is a tremdous asset 3L acquisition has allowed them to develop a real time operating system that allows them again to distinguish themselves. the Diamond TI and Ap ADI RTOS with the COTS and soon to be mukltiboard paralell systems the ability to operate the dsp on board in a timely way allows spectum to do more with less ie more number crunching fewer pass throughs ie times that numbers have to be shared[redundancy] making their boards a better value more bang for the board, faster, cooler, and smarter The last 2 years If you take a look at the history of this company I am not an authority but have a pretty good picture INn the last couple years the dsp core companies have developed much more powerful cores, bringing the cost to work with dsp to commercial industry and customers ie price points for dsp chips have fallen just like cpus so that what you to be too exspensive is now cheaper and better. The old Spectrum was dependent on MAC for profits Military where cost was not a primary issue. The prior ventures into the commercial market while offering great experience Lockheed IBM etc never were taken into production....of note is that Spectrum unlike Lock/Martin was able to develop APALS fast and successfully even though L/M had deep pockets a large dsp section they couldn't do it came to Spectrum and not only did they do it they did it in a half the time forecast and it worked flawlessly. Imagine flying a plane take off and landing down by dsp with the technology that they had to work with a few years ago: loading the analog contols and flight funtions...the plane could opperate like a computer based on real time numbers speed altitude wind sheer plane attitude etc. The fact that L/M never took it into production baffles me but none the less the experience and execution of this is remarable and helped establish Spectrums system level reputation within the industry the IBM deal Spectrum at the time had gotten into boards for pc's they had one awards for their offering and attempted a forray into the consumer market for which they had no vendor: another lesson that needed to be learned. IBM being big SSPIF being little. The company opted to take on the IBM project while potentially lucrative based on volume follow through never earned the kind of revenue that had been hoped. The boards were terrific.too good they did more and cost more for high end IBM's soho and business and there fore while by far the largest contract in dollars and units wasn't a commercial homerun. The real benefit in the long run to Spectrum.they had done work for IBM and more importantly they had gained experience in large volume production of boards and now had a track record to show oems that they could deliver volume production Geensprings SBS and Spectrum agreed to develop COTS to make the boards have standard interface for use ie easily put in and out upgradable thus allowing dsp systems to be componetized bringing down the risk to oems of investing capitol in technology that would need to be replaced..now upgradable programmable and with a standard profile application specs so that an oem could decide what board best fit there application. During the last couple years Spectrum has developed a suite of boards centered around the new C6 and SHARC Ins with the acquisition of Alex and the arrival of Ron Wages Spectrum developed its vertical market stratedgy....It worked the ins ie oems were knocking the doors down. The time from in to win. Once an oem decided to develop a project with Spectrum they can depending on the complexity of the system, oem in house talent, decide to build customize a COTS or get Spectrum to develop the final product. If the oem goes with their own in house development once the product is designed and funtioning they can market the product detail their support service and begin to sell. this can take a year or two from in to orders for cots. If the oem wants Spectrum to develop the applications then a team is put on the project. the application studied and all the talent in house can troubleshoot the system to maximize the performance and functionality. depending on the complexity of the system this could take months to a year. Again once the application is ready the oem must take it market it sell. Thew point is that there is a latency between in win and orders of 6 months to 2 years. So starting 2 years ago with suite of COTS and last year with tidal wave of ins we have gone a year into the development of products and are beginning to see the beginning of orders. During the same time many of Spectrum customers have opted to wait on these new boards/cores. this combined with the global slowdown directly impacted 98 leading to a more rapeid fall off in older system reorders. there is still plenty of life in the C4 etc depending on need of system but many of the oems were hit by Asia and threfore the trickle down effect was felt in Burnaby. Looking forward As I mentioned some weeks ago, barring some worldwide calamite y2k panic plague meteor shower or other act of G-d this is the year that those in/wins should begin to be announced with names and dollar amounts. This is the year that the company will begin to ship multiple products to multiple oems in multiple vertical markets. Once these products hit the sales vchannels rev/earnings will begin to accelerte. As more new products come to market the number of rev. channels increases like a creek becoming a river. The companies growth will be less sporatic and dependent on when an order hits the door. So this year we should get many announcements re. wins and more in's. Many of these are for applications with long product cycles ie will allow revenue streams over years without increased R&D as product is developed. So while not without growing pains/missteps the company has grown employees revenue reputation marketing a complete in house team with a reputation in the dsp world as the BEST at what they do and learned alot of valuable lessons along the way.. Predictions. This year 99 we should hit the 30% benchmark for growth without too much trouble. I am hoping for a upside suprise For the year 2k the 100$C is still the goal ie 67 million US w a float of 10M shares a breakeven of you are left 25-30M$ SGA the rest is profit. take out taxes and you are left with 10-15$M in profit and a company growing by 99 at close to 100% yr/yr. I hope that helps This is the New Spectrum the focused dsp solutions company working intimately with TI and ADI on cores to come and with a list of customers that should impress anyone. They are focused on their market and have the talent and in house expertise to separate themselves from the competition. Regards Norden ps I know this sounds almost too good to be true. This is what I see and know to be true about the company. The future is right in front of us and the company. Regards Norden