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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Peppe who wrote (11238)	5/6/1999 4:17:00 PM
From: zbyslaw owczarczyk	Read Replies (1) \| Respond to of 18016

Peppe, don't you see that many others, includiing ASIC's developer, do not agree with Doug. For a moment he accepted this, and started the same song again.He is trying to telll everybody that "we have June today" Zbyslaw

To: Peppe who wrote (11238)	5/6/1999 5:11:00 PM
From: Doug	Respond to of 18016

Peppe: Personal attacks only point to a Logic drain. ( ASIC terminology)

To: Peppe who wrote (11238)	5/6/1999 5:32:00 PM
From: Mr.Fun	Read Replies (3) \| Respond to of 18016

Some observations sure to draw flames but intended for the silent but shellshocked majority: 1) Revenue recognition policy - LU/ASND and CSCO do not recognize carrier switch revenue until it has been installed and accepted by a customer, typically more than a month after the equipment shows up on the customer's dock. This conservative policy gives those companies exceptional visibility and protects them from just the sort of fiasco that hit NN this quarter. 2) Customer contracts/relationships - If it is in fact true that customers held up orders until April as a tactic in price negotiations, this is a big problem that no other vendor seems to have and could explain why NN's gross margins have been falling. There appears to be no other explanation for 2/3s of orders coming in April - it certainly doesn't correspond to a carrier budget cycle or any other explanation. There is something wrong in sales force incentives and strategies that needs to be changed if quarters are this backend loaded. 3) Manufacturing and supply chain problems are notoriously difficult to fix. Given the interrelated nature of sales, order entry, purchasing, manufacturing, inventory management, logistics, billing, etc. the effects of process changes can ripple throughout the organization. That is why ERP systems take 3 or 4 years to implement. Do not expect this to take 2 quarters to fix. 4) The description of how the Mainstreet 36170 is customized at the end of the manufacturing process is scary. Everyone else builds them directly to order and manages the design change process very closely. This could be an issue in the manufacturability of the basic design - another excruciating problem to fix. 5) Forecasting - close attention to sales forecasting should have rooted out this problem much earlier. Poor forecasting also plays havoc with suppliers, causing inventory overstocks and stockouts that screw up COGS and lengthen manufacturing lead times. 6) Manufacturing leadtimes - In a market where competition between service providers is fierce and demand is skyrocketing, failure to meet agreed delivery dates is a serious problem that can lead to lost orders in the future. Ask Ericsson which just lost a $1billion wireless contract at least partly because of a poor record of delivering on time. 7) Product diversity - With only one product driving growth there is a significantly higher risk of a blown quarter, even if the general state of demand is good. The street rewards stability and punishes extreme volatility. Believe it or not, if it weren't for takeover speculation NN would be under $20. Good news: in the game of telecommunications equipment ATM musical chairs, NN is the last chair left with at least 4 players circling. When the music stops, someone will sit in the last chair, no matter how rickety it is.