Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: KY who wrote (156)	3/28/1999 8:47:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 3951

KY --- Immi asked the same question and really all I can do is ask questions as I've not looked at them since they came public. Back then I remember they had huge VC backing and based on the shares outstanding versus the float, it doesn't appear to have changed. In reading over ETEK's SEC documents, a couple items stand out: revenues increased 52.9% to $38.7 million in the second quarter of fiscal 1999 from $25.3 million in the second quarter of fiscal 1998. The revenue increases were primarily due to increased shipments of the Company's Wavelength Division Multiplexer components and modules ("WDMs"), Couplers, Isolators, and Micro-Optic Integrated Components ("MOICs"). Unit volume increases were partially offset by a decline in ASPs. A relatively small number of customers have accounted for a significant portion of the Company's total revenue to date, and the Company expects that this trend will continue for the foreseeable future. Ciena also relied on a few customers and were nearly destroyed when AT&T pulled a contract. Any chance of this happening with E-tek? Since inception, the Company has financed its operations and met its capital expenditure requirements primarily through cash flows from operations and borrowings. The Company's operating activities provided cash of $15.7 million for the six months ended January 1, 1999 as compared to $15.9 million for the six months ended December 31, 1997. At January 1, 1999 the Company had cash and cash equivalents of $80.9 million and working capital of $83.9 million. They also have LT debt of $24.7 million. Compared to: UNPH $114 m. in cash and no LT debt; and SDLI $29.4 million cash (figure given on last CC) and no LT debt. Is ETEK's cash position strong enough to withstand pricing pressures? They don't compare favorably on cash per share, either: UNPH has 2.87; SDLI 2.04; and ETEK 1.31. The first two have no long term debt, and ETEK has 24.7 million. Share comparisons --- ETEK has 61.4m outstanding and only 5m in the float. SDLI has 14.4m outstanding and 11.3m in the float; and UNPH 39.7m outstanding and 30m in the float. Doesn't ETEK's small float make it less liquid and therefore riskier? I recognize with emerging companies, as ETEK clearly is, you have to make allowances. Just the same, I see some red flags that make me cautious. As for the comparisons with UNPH, I've not included their merger with JDS Fitel, so the figures are merely academic and don't represent the combined strength. I've also not compared products. Since ETEK's are primarily passive components, they should be compared to UNPH more than SDLI. Again, E-tek's value may be more than the sum of its parts and I certainly welcome more enlightened comments. Pat