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Technology Stocks : Advanced Fibre (AFCI) ** IPO -- Ignore unavailable to you. Want to Upgrade?

To: Nick Papa who wrote (2146)	4/16/1999 11:51:00 AM
From: Nevin S.	Read Replies (1) \| Respond to of 3299

Highlights from Hambrect & Quist report dated April 7: We believe AFCI's appointment of its new CEO is very positive for the long-term outlook of the Company. We continue to maintain a high degree of confidence in our March quarter estimate of $.03 EPS on $65.1 MM in revenue. During the March qtr. AFCI experienced normal seasonality in its domestic business, however, it appears that it may have experienced some softness in its international business. We believe that the company continued to follow its revised Asia-Pacific strategy of limiting its operation in China to continue the work required to comply with the V5.2 standard. It appears that the Company's operations in the Asia-Pacific geographies continue as per plan. While we do not expect a significant revenue contribution from these countries during FY99, we believe that AFCI's current efforts in these areas will be vital in allowing the Company to continue to be a strong competitor in the global market for DLC equipment over the long term. We further believe that AFC's CLEC business will continue to show growth during the March qtr. Because WinStar accounted for approx. 33% of AFCI's revs. for the Dec. qtr., some investors expressed concern regarding continuity of that relationship. We believe that AFCI will will continue to maintain a strong relationship with WinStar and estimate that WinStar will contribute as much as 7% of rev. in the March qtr. We also believe that AFCI is aggressively pursuing and will acquire new CLEC business during the June qtr. and throughout the remainder of 1999 and into 2000. We remain confident in our June qtr. est. of $.06 EPS on $76.6 MM in rev. For YE 1999, we are looking for $.30 EPS on $343.7 MM in rev. For YE 2000, we are looking for $.45 EPS on $441.6 MM in rev. We expect that over the coming qtrs. strengthening business in AFCI's relationships with independents and CLEC's, improvement in its international operations and new RBOC contracts may contribute to numerous upside opportunities. We believe that these estimates are conservative and that AFCI has the talent, marketing skill and the technologically advanced products to meet, if not exceed, these estimates throughout the remainder of 1999 and into 2000. Upside opportunities: ....First, we believe the appointment of John Schofield presents significant upside that investors should not overlook. We believe that John possesses several unique attributes that may allow him to move AFCI to the next level of its development. He has deep experience in negotiating with RBOCs and CLECs - two targeted areas of growth for AFCI. Also, he has broad international experience in Asia-Pacific, Europe and Latin America - three key growth geographies for AFCI. Within the next 30 days, we believe that AFCI may announce a contract for DLC equipment with a major RBOC. We believe that this initial contract will be for AFC's lower line count DLC's, however, we also believe the opportunity for follow-on business with this customer could scale to include the full suite of AFCI's products over future quarters. Internationally: We believe that AFCI continues to remain well positioned to capture substantial business from a large Asian telco customer. We also expect AFC's South African business to remain strong. We feel that the company will begin to experience renewed growth from its Latin, Central and South American opportunities over future quarters. We believe that one of the issues that AFCI continues to experience is that certain telecom carriers have been slow to implement the higher-end features and functions that the UMC 1000 currently provides. Many telcos are extremely voice oriented and continue to work feverishly to satisfy demand for voice/dialtone and are just beginning to transition to data services that they have been promising customers for years. ....There's more to the report and if you are a C. Schwab customer you can access it on their website under analyst's reports.