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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: digger who wrote (6551)	3/26/1999 12:36:00 PM
From: Michael Olds	Read Replies (1) \| Respond to of 17679

Thanks, digger. No reflection on you, but I have been trying this for the last half hour and I get half the page (of course the ad comes on first) and then nothing, or the title page with no contents page, and then I just sit there. This is the computer age, where investors get instantaneous information? There must be a better way. Can anyone explain to me why this is not on the SEC Edgar site?

To: digger who wrote (6551)	3/26/1999 1:28:00 PM
From: Ed Perry	Read Replies (1) \| Respond to of 17679

From the 10K ...... first takes [Some sales and marketing excerpts:] The Company is actively pursuing strategic partnering arrangements with leading video server hardware and software companies in order to broaden its reach into this market beyond its in-house sales and marketing resources. The Company anticipates that it will need to increase its sales and marketing efforts to be successful in penetrating the commercial data markets with its 19-millimeter storage products, increase sales at MicroNet due to its new product offerings in early 1999, and bring together the necessary capabilities to build the Company's presence in Internet video markets. Also, the Company may elect to use aggressive pricing as a marketing strategy to enter new markets for its storage products. While these efforts would be designed ultimately to increase revenues and profitability, they might reduce the gross margin percentage of net sales in the future periods. Beginning in 1998, ADSC has sold a limited number of its DST tape libraries to television broadcasters and cable networks. The Company believes this market may represent its largest commercial opportunity for the sale of its DST product line for the next several years. [Comments: Looks like the beginnings of a commercial sales and marketing effort outside of their customary sales channels. As forewarned, margins may suffer for the benefit of revenues.] [Some surprise factors:] [Re. the Oct 98 referenced "government program"] In both cases, deliveries would occur during the period 1999-2001. Sales of the above products are subject to the negotiation of definitive agreements and terms and conditions with the respective customers, and there can be no assurance that satisfactory contracts will be completed or that any firm orders will result. [Re. MicroNet product acceptance currently underway] The Company believes that MicroNet sales levels during this period have been adversely impacted by the decision to withdraw from lower priced product lines and to refocus on higher performance disk-array products such as the DataDock 7000. The Company is developing a new generation of disk arrays (the Genesis product line) that offer substantially improved capacity, performance and features, such as fibre channel connectivity. These products are scheduled for shipment in the first half of 1999. [Re. royalty income:] The Company intends to pursue additional digital video recorder licensees. The Company is also assessing whether manufacturers of video games, DVD recorders and digital television receivers are using its patented technology. There can be no assurance that the manufacturers of these products are utilizing the Company's technology or, if used, whether the Company will be able to negotiate license agreements with the manufacturers [Re. consolidation of affiliate losses:] At such time Ampex increases its equity interest in these companies over its initial 19.9% investment, Ampex will include its equity interest in losses prospectively generated by these companies. Ampex's equity in the losses of its Internet video affiliates may be material to consolidated results of operations in future years. [About the acquisitions] If Ampex elected to exercise its option to acquire control of all of these Internet video businesses in 1999, together with its initial investments therein, it will have invested approximately $12.7 million. [ If current investment is 19.9% and controlling investment is 50.1%, then it has invested 5.04 million of its 42.1 million proceeds of Jan 98 and July 98 12% notes (before offsets for MicroNet etc. of ~13 million--- looks like a comfortable 24.1 million remaining from the Cum. Pref. for working capital and still other acquisitions] [About the Internet business plans ] .. the Company intends to build in-house Internet video production and distribution facilities during 1999 in Los Angeles and New York City. There can be no assurance that the Company will generate any revenues from its in-house Internet activities, and it estimates that while TV onthe WEB and AENTV have historically generated modest profitability, these businesses will incur significant production and marketing expenses to build content and presence which will result in losses being incurred by them for the foreseeable future. The Company believes that it has sufficient working capital resources to fund the exercise of control options in affiliated companies and capital additions and operating expenditures of its in-house Internet activities throughout 1999. During 1999 and in future years, the Company expects to make strategic acquisitions and build in-house capabilities relative to its Internet video strategy. These activities are expected to require significant expenditures that may result in consolidated net losses while the Company is building its presence in Internet video markets. ********************************************************************** My observations: It looks like one to possibly two more years of transition while Ampex morphs from a old guard military industrial complex supplier to a top line Internet, mass data storage competitor. While safe from business failure, and relatively immune to an overall stock market correction, I would expect low price valuations during this time unless: * There is substantial movement and market sentiment recognition in WebTV, AENTV and possibly IPO's to bring this out. * There is real substance an rapid progress in the development of the NY and LA "in-house Internet video production and distribution facilities". * There is the announcement of a strategic partnership / alliance with one of the biggest caps on the planet. * Just plain good luck in sharply increased sales fro MicroNet, and newly positioned DST lines royalty income etc. By low price I mean a holding in the current range of 2.5 to 4.0 with a steady drift up to the level of about 6.0 then, if one or two strategies come in, an ascent in the high teens plus. Ed Perry