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VTSS Investor Forum

2 investor conference presentations in Sept '13

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http://finance.yahoo.com/news/vitesse-present-upcoming-investor-conferences-120000130.html

The dates are Sept 19 and 26. Neither conference is what anyone would call high profile but at least they are conferences.

Most important part is the timing. Mgt. is on record for guidance of revenue for the quarter ending Sept. It would not instill confidence to stand in front of a set of professional investors on Sept 26, not address the revenue guidance for the quarter ending in 4 days and then miss the number by any material amount.

So we will get an update on the revenue for the quarter either by explicit statement or by silence (which will be viewed as confirmation of the current guidance, (which I forget but isn't it something like $26-$28 million?)).

Posted by dlog - 12 years ago

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VTSS scheduled for 2:15 today at Imperial conference, right after Bonanza Creek Energy. The conference includes a poker tournament. How appropriate.

Posted by thereinman - 11 years ago

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Just finished hearing the presentation. The last answer in the Q&A was the only thing that I would consider new. Gardner said VTSS has been in a transition period but was now in the position where new products were growing faster than the mature products were decreasing and then said something like, we are now in the 20% growth mode starting with last quarter.

I wouldn't put too much credibility in that but that is what he said. Interesting in that Q4 certainly won't come in in 20% above anything. If it comes in at $28 million it will be flat with last yearQ4 and Q3 of this year was $26.4. That's why I wouldn't put too much in the statement. Some at VTSS are math challenged.

The other thing was the IP revenue expectation. Restated that IP should be 7-10% of total revenue. Didn't sound like they would get there this year. but said there were plenty of projects. They just haven't been able to close yet but they would. (Heard this before.)

the one good thing that I didn't hear was a push back on the date when these new design wins would start to add revenue. Usually this time of year VTSS moves its expectations of achieving revenue growth from the coming year, in this case 2014, to 2 years ahead. They didn't do that. So maybe that is a positive change.

Posted by dlog - 11 years ago | Updated 11 years ago

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Just hit $3.00 per share (9/20/13), up 6.3% one day after the presentation. can't complain about that. Last close above $3 was April 2012.

Posted by dlog - 11 years ago

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We are up against resistance ($ 3 area) and need volume to really pickup (Exceed 385k avg. daily volume) and blow through this level.

The action in the stock is encouraging.

Posted by Techinvestor - 11 years ago

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Last quarter was definitely an inflection point in terms of revenues and I think someone may have become aware of this at the presentation from the price action on shares today.

Posted by phobos - 11 years ago

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I think the most interesting thing today that I have seen was the action on the Point and Figure Chart - I have been waiting for this $3.00 level Breakout, but charting up to $5.75 Price Target - from their lips to God's ear.

Posted by Satbob - 11 years ago

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The Cisco butterfly effect-
Crg is smartly championing his Cisco connection, sounds more and more that The BIG early adopter of Intellisec is Cisco.
I am still of the belief that this companies problems down the line will be meeting the demand of her hungry costumers.

First to market with 16g now sampling 28g!! while competitors reach out and buy their way... Vitesse on the other hand creates from within. Koudous to her world class engineering team.

In this presentation I sensed an 'HOW YOU LIKE ME NOW' attitude in Crg's voice, an in your face play-groung 'yea can you beat this" kinda like his DUNKING on competitors...

I like, I like....
Peace

Posted by GARIF - 11 years ago

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One of the very notable CEO mistakes that Gardner has made and hopefully has ceased from now making is the haphazard outlook of projected and or expected numbers.

This, as we all here know very well has been going on since the beginning of his reign. I believe that this is also the very reason why so many view Gardner as a CEO failure.

promise something , then pull back from that promise, over and over and over.......... credibility is then lost for good or very difficult to reattain.

Vitesse has a very broad customer base and with new design wins beginning to ramp,in a big-way looks to be on the right track to participate in the next worldwide upgrade of the telecom equipment cycle.

The big question will be and has always been: is Gardner the suitable CEO to take Vitesse to the top ?

With the amount $ that Needham has on the line, I would believe they must be calling most of the shots(probably will be for some time) and are showing Vitesse off to many of the smaller investment firms. In time, Needham will be wanting a nice payday for their investment.

Likewise for Mr. William Martin, who has two members on the BOD, along with a boatload of cash invested. I am also sure in time the big $ holders will ALL be questioning if Gardner is the correct choice as CEO of Vitesse

Posted by christ3opher - 11 years ago | Updated 11 years ago

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Those of us with a long track record with VTSS and CRG know that Chris has NOT mastered the art of UPOD (Under promise-over deliver). He has lost his "Street Cred" and is a liability in the CEO position.

He has excellent engineering knowledge and of the product line but is ill suited for the CEO role. It's only a matter of time that Needham and Billy Martin will figure this out!

Posted by Techinvestor - 11 years ago

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VTSS scheduled for the next IR presentation on Thursday at 10:55 eastern. Looks like this is the last time we will hear anything until VTSS reports 4Q and FY 2013 earnings. Historically that has been the first or second week in December. So this is the last hurrah for quite a while.

If we don't see any update to the current 4Q revenue guidance we have to conclude revenue will come in at the stated guidance of $26-$28 million. It would be a major mistake to stand in front of investors in a formal presentation with only 4 days left in the quarter and mislead them with revenue guidance. So absent any announcement updating the guidance we have to believe VTSS will report revenue in the range or at least very close to that range.

Of interest, management still does not have sufficient confidence to give some guidance however non specific, for the full year ahead. We do get the "new products will double" but nothing on total revenue. Personally I think they have a good idea of where total annual revenue will be but they don't want to call attention to the fact they know they aren't going to grow total revenue.

Posted by dlog - 11 years ago | Updated 11 years ago

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AMCC now sports a Price/Sales ratio of 4.5

VTSS sits at 1.6

In the June quarter AMCC finally showed some year over year growth in sales, 31%. The stock is up about 40% since then.

No debt long term debt on the books for AMCC. AMCC is on a March fiscal year and had down sales from 2012.

If VTSS reached a 4.5 price to sales ratio (at current sales levels) the stock would be at $8.00+.

Interesting. Just need some growth in revenue. (which we have been promised for the past 5 years. But maybe someday it will come.)

Posted by dlog - 11 years ago

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Yes, it's unfortunate that VTSS has the debt problem overhanging them. I wonder when they are going to announce a debt reduction plan, especially since they raised some decent capital with their stock offering.

It's coming to a point where they need to increase revenue- design wins, cost reduction, and spreading the word of new products isn't going to hack it long-term.

Posted by Techinvestor - 11 years ago

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I would believe that after tomorrows investor conference with Craig Hallum, we will be pushing through $3, FINALLY

The only problem with all of this is: we have had shitty volume all week, with a few days of high volume after last weeks investor conference


Tech,
The debt reduction may not happen until the debt is due in 2014. this has been very old news all along. At this point I will assume that it is in the holders court.

Posted by christ3opher - 11 years ago | Updated 11 years ago

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Agree dlog, hints of better numbers tomorrow would blow this thing past $3 easy. Tomorrow is last opportunity for Crg to toss us a carrot, a sweet one that is!!!

Posted by GARIF - 11 years ago

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I'm looking for two things from revenues at the close of the fourth quarter.

I'm looking for absolute returns, that is I'm looking for this quarter's numbers to be better than last quarter's (that is, last quarter really was an inflection point), although we're still close to the inflection point, so I'm not very optimistic about a stunning surprise to the upside. I think a reasonable, yet optimistic number would be right around $27M in the middle of the range.

The other thing that gets very little attention, but is so important is the quality of those earnings. VTSS now has a great many customers with no one customer dominating as a revenue source. If there are any unpleasant surprises because of customer issues, they will likely not have a significant impact. Also, having a predictable (we all wish it were larger) revenue stream makes minimizing expenses that much easier when there are fewer contingencies to be planned for. In fact, I think the quality of earnings speaks more to VTSS' future growth than the current amount of earnings.

The one wild card is still the IP. I don't have a lot of visibility here, and I'm guessing that there was probably some IP licensed to competitors, but perhaps too there might be some licensing done to businesses in VTSS' new markets like automotive or industrial, where VTSS doesn't know the business. If there is any surprise to the upside, it will likely come from IP and it might even be a surprise to management.

Hope springs eternal.

Posted by phobos - 11 years ago

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You know if all you did was listen to these guys they sound reasonable and you might come away thinking this is a decent company. Then you look at the numbers.

If they can't achieve increased revenue in FY 2014 it really is time to sell this company or just close it down. FY 2013 revenue will end at $103 million down from $119 from 2012 ( and down from $140 the year before etc.)

Here is the quarterly breakout from 2013

1Q (Dec 2012) - $25.7
2Q (mar 2013) - 24.7
3Q - 26.4
4Q - 27 (estimated)

20% growth from here actually looks very doable - maybe. If VTSS can product revenue in the $30 - $32 million range in each quarter it will achieve 20% for the year. If you make the assumption that there could be $7-13 million of IP revenue in FY 2014 it really starts to look doable. Basically if VTSS can produce $28 million of product revenue each quarter then add $10 million in IP and you have 20% growth.

It could be the first year of growing revenue in basically forever. But I have pushed these numbers before and we all know what happened.

Posted by dlog - 11 years ago | Updated 11 years ago

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Of note in todays presentation (9-26-13) if I heard correctly.

Net Loss carry forwards: $10- $15 million. After that is used it will be about $1.5 million per year.

I wouldn't hold him to it or put too much credibility in it but I thought I heard Gardner say "a few quarters out and we will be profitable."

expect gross margins to increase 1 percentage point per quarter going forward.

will take savings from the recent move and invest it (about $1 million) in R&D.

and here is my biggest fear. Assuming revenue actually does start to increase too many companies simply spend the $$ that should go to the bottom line (and thus the shareholders).

Posted by dlog - 11 years ago

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Thanks for update on today's presentation. The "a few quarters out and we will be profitable" sounds oh so familiar. Savings from recent move ($ 1mil) must be recurring savings or he got his security deposit back. It has to increase non-recurring cost to move vs. no move at all.

Good news on technical front is we have broken through $ 3 on volume- have to hold through the close.

Posted by Techinvestor - 11 years ago

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Another attempt to hold above $ 3/ share today although volume not very strong at this point.

The anointed few (e.g. Billy Martin) from June "Public" stock offering at $ 2.15 are doing quite well with a 40 + percent gain.

Posted by Techinvestor - 11 years ago

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Vitesse engineers met this week (9/26/13) in Dusseldorf, Germany. Introducing the European Union advantages in applying the Vitesse Veritime IEEE 1588 advanced networks.

Three Vitesse engineers speaking:

Martin Nuss, CTO Vitesse
Thomas Joergenson, Principal Systems Engineer, Vitesse
Ole Andersen, Sr. MTS Applications, Vitesse

The next European Conference to be held will be in Lisbon, Portugal. November 5-7, 2013

interesting story below explaining how European unity is expected to accelerate the LTE rollout.

http://www.maravedis-bwa.com/templateemail/newsletters/091713/european-telecoms-unity-should-drive-accelerated-lte-roll-out.html

Posted by christ3opher - 11 years ago

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Between now and the first couple of weeks in December we have little chance of getting any more direction on revenue. I guess there is a possibility VTSS could announce an IP contract. But ex that we will have to wait. The price of the stock could go anywhere just depending on external events. But when year end numbers come out in early December I assume we will get our first guidance of what Dec revenue (just a couple of weeks away by then) will be. Then we will see if this great revenue surge is alive or once again just a phantom on a never to be reached horizon. Product revenue had better be more than $27 million and really it should be north of $30 million. Then even I will start to believe.

Posted by dlog - 11 years ago

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projected revenue for Q4 is listed at $26-$28 million

Posted by christ3opher - 11 years ago

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The $26-$28 million of projected revenue for the 4th quarter is for the period ending September 30, 2013, the last quarter the fiscal year,and hence the "fourth quarter" of the fiscal year. I have not seen any guidance from the company for the revenue for the period ending December 31, 2013, which would be the first quarter of fiscal 2014. That is the quarter I am hoping will be north of $30 million.

Historically VTSS has not commented on guidance for the next quarter until they have the earnings release for the quarter just ended. Because this is the end of the fiscal year and the financial statements have to be audited, it has typically been the first or second week in December when VTSS finally gets around to releasing the numbers to the public. It is then management has provided guidance on the next quarter, in this case it will be the quarter ending December 31 and only 20-25 days after they will release the numbers for the fiscal year ended September 30, 2013. i would love to say they should have a good fix on what the revenue will be by then. But typically these tech companies can ship as much as 50% of the full quarters revenue in the last 20 days of the month.

Posted by dlog - 11 years ago

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Holding above $ 3 today so far on decent volume- let's hope this will establish a new level of support for moves higher.

On the subject of revenue, it is pathetic that for years we haven't been able to increase revs despite new products/design wins. Maybe we need to resign ourselves to the possibility that we will always be a $ 25 - $30 mil/ Qtr rev company.

Posted by Techinvestor - 11 years ago

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Tech:

it is my opinion that VTSS should in fact be run profitably at a revenue level of $25-$30 million. It would make the stock price soar. Management however has continued to size the company for a revenue level they have never been able to hit. My fear is if the revenue level actually does increase management will simply increase spending and keep the company in its perpetual state of cash breakeven/net loss.

Posted by dlog - 11 years ago

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You're probably right dlog. Reminds me of the famous quote from many years ago, when Edward Bennett Williams (Owner of the Washington Redskins) said his coach, George Allen, " was given an unlimited budget and he exceeded it ".

Probably applies to CRG.

Posted by Techinvestor - 11 years ago

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VTSS fighting to hold $ 3. Volume is still low, so no panic selling at this point.

Posted by Techinvestor - 11 years ago

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Regarding earlier discussion about lack of a debt reduction plan- I have concerns that CRG is going to squander the money raised by the last "public" stock offering before the debt is due in 2014.

Hopefully the Board will insist that a majority of the money be held for debt reduction and not just used for operating expenses.

Posted by Techinvestor - 11 years ago

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Tech,
All will be well, debt will be paid at maturity, believe it or not Crg actually wishes the best for this company. Worries are over, company can focus on normal matters like building great products, sharing the uniqueness of their brands with possible buyers etc, etc.

While competitors are licking their wounds from ill-calculations Vitesse focus has never been clearer; news in coming months will prove this to be true.
it's going to be alright in my eyes,

peace

Posted by GARIF - 11 years ago

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I hope you're right about CRG. I admire your optimism GARIF- let's hope your vision comes true.

Posted by Techinvestor - 11 years ago

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