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VTSS Investor Forum

earnings season upon us

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http://finance.yahoo.com/news/appliedmicro-sets-october-24-2013-130000048.html

AMCC has set October 24 to report earnings for the quarter ending in September.

VTSS is on a September fiscal year so historically has not reported earnings until mid December. We will get a good look at how others in the industry did for the September quarter long before December. More importantly we will get comments on what others in the industry are expecting for the December quarter.

by the time VTSS reports its September numbers the December quarter will be within 2-3 weeks of being done. If we don't see some significant and meaningful movement forward in the revenue number during the december quarter I am afraid I will have to conclude that all of the hype of design wins has been just the continuation of a song that has been sung for the past 5 years.

Posted by dlog - 11 years ago

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Agree completely Dlog! this is put up time for crg, no more wait till next Q, China still sluggish... If indeed we've won hundreds of designs these past few years, IT IS TIME TO SEE RESULTS crg!!
I too will be sniffing at competitors announcements like a hound.
peace

Posted by GARIF - 11 years ago

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Martin Nuss must be terribly frustrated in VTSS management's inability to monetize a great product line and technology that he continues to expound on.

Posted by Techinvestor - 11 years ago

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Tech:

Not being a EE this is what has been the issue for years. Are they developing products that are technically wonderful but have no market (or at least not a big market), and/or do they simply lack the management marketing talent to penetrate the accounts even with excellent products. In the end it all is the same. No sales. Hopefully that changes but this has been the issue all along.

Posted by dlog - 11 years ago

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In defense of VTSS, I would say that in order to capture a market, there has to be a paradigm shift. We have been waiting for the paradigm shift, and 4G LTE is it. I don't think that the timing of the revenues is anything the present regime is doing or not doing. I think it is the nature of the business. I fully expect 2014 to be the year VTSS recovers. Look for a $120M 2014 and a the first $40M quarter by Q2 or Q3 of 2015. The macro environment is troubling, but there's nothing we can do about it. Who knows, shares of VTSS may one day be more valuable than any amount of dollars.

Posted by phobos - 11 years ago

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Phobos I hope you are right. But this is the same exact story we have heard since 2010, ie the next 12 months will show growth and the real growth will come 18 months out. Tomorrow never comes.

Having said that I would consider $120 million for Fiscal year 2014 to be a disappointment. That would only be $30 million per quarter and the sept quarter is expected to be $26-$28 million. I hope we see more growth than that.


Here is what I would think should happen to re-establish some credibility and excitement. The number in () is the previous year revenue and the second number is the percent growth versus the previous year.


Product revenue
1Q - $30, (25.7, 16.7%)
2Q - $32, (24.7, 29.5%)
3Q - $33, (26.4, 25.0%)
4Q - $35, ($27 estimate, 29.6%)

IP revenue - $10 million

total revenue = $140.0 versus $104.0 an increase of nearly 35%. (10 percentage points of the increase comes from the IP revneue. Product revenue would be up 25%,)

I have to admit given the history of VTSS my confidence in the above numbers is very low. But if they hit $120 million total revenue and have any IP revenue to speak of that would mean product revenue would essentially be flat with 4Q revenue for the hole year.

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

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"He has been instrumental in orchestrating Vitesse's transition to Ethernet for both Carrier and Enterprise markets, significantly driving our new product revenue and market share growth. Uday has also been pivotal in the definition; launch and design win traction for Vitesse's Ethernet Switch Engines and SynchroPHYs™ that feature our VeriTime™, ViSAA™ and Intellisec™ technologies."


Great move! who better to share the true capabilities of these products than someone who helped build them.
In the final analysis GREAT PRODUCTS sell themselves, Uday, is there to try and sway the few stubborn ones. The companies finances are in order, stability and vitesse rhyme again, hell! this might be the best job at the Vitesse candy store! kinda like riding on back of SECRETARIAT back in the day.

It's GO BIG or go home time CGR,! anything under $125 million for 2014 will be a failure. We are championing your success big guy.

Peace

Posted by GARIF - 11 years ago

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http://finance.yahoo.com/news/vitesse-names-uday-mudoi-vice-120000200.html

What happened to the executive level marketing guy who was hired a couple years ago (I might have the time frame mixed up)? I guess I was not paying attention. When did he leave?

Posted by dlog - 11 years ago

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dlog,

Steve Perna is the marketing exec. you are speaking of. VP of Product Marketing

He joined Vitesse in August of 2010 and left in May of 2012.

Posted by christ3opher - 11 years ago

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You know what dlog, I forgot that VTSS was aiming for a revenue growth target of 20% per year, which they should hit next year (4.66% per quarter). This brings my estimate for 2014 down to about $118M. Now that includes NO IP. I know what VTSS said about it being 10% of overall revenue eventually, but I just can't quantify it now. If they did reach their goal of 10% of revenue for IP in 2014, then $130M would not be out of the question for yearly revenue and the $40M quarter would be more toward the end of 2015. This is my guesswork anyway.

Posted by phobos - 11 years ago

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Who exactly should be considered our peers? We are so small (Cap: 177M, Rev/Qtr: 26M) compared to AMCC (Cap: 1.03B, Rev/Qtr: 52M) or PMCS (Cap: 1.39B, Rev/Qtr: 128M).

Posted by Techinvestor - 11 years ago

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here is what strikes me. AMCC's quarterly revenue is 2X that of VTSS. AMCC's market cap is 5X that of VTSS. That is very telling.

Posted by dlog - 11 years ago

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True to the above, but what excites me is that AMCC turns to Vitesse to help her technology work better.

"(CAP: 177M,)" not so long ago it was around 100M.
We're moving up in the world friends.

The following blog brings to mind how Vitesse for 2012 was blessed with awards from both ZTE and Fiberhome. CRG, Nuss and gang has us where the action is friends! the monetary rewards are coming. We're out of the la brea tar pits- nothing but green($$) pastures ahead of which we're going to get our share.

lackeygarrett • 2 hours 39 minutes ago Flag
1users liked this postsusers disliked this posts0Reply
Small Cells Mean Big Changes for Mobile Networks
Already an important element in 3G networks globally, small cells enable network coverage to be easily extended to accommodate data growth, especially in busy outdoor areas. However, as operators move to 4G/LTE networks and introduce heterogeneous networks (HetNets), small cells become even more important. Why? Because LTE technology promises higher bandwidth in the radio interface, end-users also expect better service, lower latency and more throughput. This also adds requirements for backhauling small cell traffic, which must not become the bottleneck.

“The mobile network is undergoing the biggest and most rapid change in its history due to small cells – they now account for 63% of all base stations globally. In 2013 we’re going to see it spill into the streets, shopping centers and enterprises,” predicts Gordon Mansfield, the Small Cell Forum’s Chairman.

Mobile Broadband and LTE to Drive Small Cell Growth

The small cell market is forecast to hit $2.7 billion by 2017, according to Infonetics Research. Geographically, Infonetics expects Asia Pacific to lead the small cell market in 2013 with 50% of all units shipped, followed by EMEA with 34%, North America with 14% and Latin America with just 2%.

Posted by GARIF - 11 years ago

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>>> here is what strikes me. AMCC's quarterly revenue is 2X that of VTSS. AMCC's market cap is 5X that of VTSS. That is very telling. >>>

means we have room to run after debt is done - -AMCC has no debt - -has promised $300MM in annual revs off their server on a chip - -so mkt takes notice of the brag - - - CRG said he would no way take on the risk of going up against INTC, AMD and a few other giants in the enterprise blade server market - -AMCC sold off a unit to make their last qtr - --we will see how they fare in this one -- i see them struggling but hope they make it -- cause they pay a royalty to VTSS for their IP contract for hardware error correction of a 100 Gb data stream - -so far no production royalties have been paid. all supposed to be starting in 2014 - - - AMCC best hope they ship before the bell tolls - -and that is out of their control - -all ship in production when china and the usa govts are happy with their ability to control and monitor the net space and the trial runs go smooth enuf to roll production. think snowden and understand why vtss has had a 2 yr delay in shipments - -this is a huge undertaking - -many facets - -lotta corps workin with - more than against each other -- -AND the zte and huawei wins at china mobile say we are close to production qtys -- and vtss is Inide the top 6 winning vendors dW1

Posted by daWiley1 - 11 years ago

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thanks wiley1,
Crg has always talked about China" needing to comeback" well China is starting to dance and Vitesse has been nicely invited to that party. I just hope our friends dance fairly- that's always my fear with china.

I believe CGR had said that MEF would brings us 50 million the next two years; but was this not before our latest ability to expedite that process to under 6 months? since Vitesse is by far the leader in this field, this faster approach should allow us to grab an even larger piece of this pie; I see where 50 million could easily be revised in the near future.

Perhaps my ignorance is getting the best of me again?

Posted by GARIF - 11 years ago

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Tech -- go to the product brief

https://www.vitesse.com/products/download.php?fid=5121&number=VSC7468

and just look where jaguar is in the network.

Vitesse has started at the edge and is now making its way into the core network. What an excellent strategy! Once customers start to standardize on proprietary software requirements, VTSS could wind up owning the network!

I'm very encouraged.

Posted by phobos - 11 years ago

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LSI reported earnings yesterday. Sales up 8% versus same quarter last year (Y/Y). EPS flat with last year at $.08.

No guidance for the december quarter but "2014 will be a good year" whatever that means.

http://finance.yahoo.com/news/lsi-industries-inc-reports-operating-104500384.html

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

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Thanks phobos. LSI- after initial price dip, LSI up slightly on the day.

To show importance of revs and forward looking estimates, RFMD reported turnaround to profit, beat on revs & earnings, increased margins, forecast earnings above street estimate, BUT revs to be below estimates- stock punished (down 10 % or so). Dragged down Skyworks) SWKS also.

There's a message there CRG.

Posted by Techinvestor - 11 years ago

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AMCC just reported. Sales up 2% from 90 days ago. Up 19-20% from the same quarter one year ago. EPS basically flat although technically up 50%. 2 pennies 90 days ago and 3 pennies this quarter. One year ago the quarter showed a sizable loss of 16 cents.

During the conference call the CFO guided December revenue to $53-$57 million. The sept quarter just reported was $55 million. So AMCC is looking for flat revenue plus or minus 4%. Certainly nothing booming here. They also cited 70% of the expected revenue was already either shipped or already ordered.

Asked in the Q&A about March revenue. Answer was we don't give guidance out that far but don't expect much to change in the current "run rate." I know VTSS is not AMCC but I would have much rather heard from AMCC that revenue was going to move up substantially. Why do I have this feeling VTSS is going to do it to us again?

http://finance.yahoo.com/news/applied-micro-circuits-corporation-reports-201700048.html

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

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I wonder if AMCC licensing IP from VTSS just caused VTSS' share price to tank (?) Is something up?

Posted by phobos - 11 years ago

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Let's hope this weakness in VTSS passes quickly. I would hate to watch the gains (all the way to $.15 per share pre reverse split) be given back.

Posted by dlog - 11 years ago

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It's significant, but not huge volume. I'm a little worried.

Posted by phobos - 11 years ago

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The sector has been punished hard the last few days! it's a testament to her new perception that she is only down so little; if it continues next week than i will fear someone in the know is getting weak knees. Now that will make things very scary, as it would bring "why do I have this feeling Vtss is going to do it to us again." to life AGAIN.

Posted by GARIF - 11 years ago

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Volume 402k shares- close at $ 2.86.

Not good that it wasn't able to hold support in $ 3 area after nice breakout recently. Let's hope some of the "$ 2.15 crowd" from the recent "public" offering have sold here, because as we sink lower they may rush to lock in their substantial gains and sell.

Posted by Techinvestor - 11 years ago

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This does not give me a warm fuzzy feeling regarding VTSS's upcoming Dec. 2 Quarterly results. The market is punishing companies that even meet earnings estimates that are light on Revs.

Posted by Techinvestor - 11 years ago

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It's still a very difficult macro environment ... you're right ... VTSS had damned well better deliver at least on the $27M. One more quarter of "softness in China" will get us down to the $2 range again. Look at how PMCS was punished today.

Posted by phobos - 11 years ago

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PMCS provided guidance for the december quarter for revenues of flat to down 8% from the september revenues.

Here is from Zacks:

However the company provided weak fourth quarter guidance and stated that it does not see any material improvement in the macroenvironment.

Posted by dlog - 11 years ago

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The PMCS "macroenvironment" statement probably moved up Gardner's "Reasons we didn't well this quarter" list. He always holds out a ray of hope with " we are gaining traction" in certain markets, gobs of design wins, and operating cost cuts, etc.

I noticed this week, some companies that beat/met estimates with operating cost cuts instead of good revs were punished.

Posted by Techinvestor - 11 years ago

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If VTSS really has all these design wins, is winning all these "bake-offs", and is gaining market share, then perhaps this is what we're seeing in the flat to declining revenue stream of the competitors (?) Am I drinking the Kool-aid? It will be interesting to see if the decline in share price is due to the exit of a major investor or just weak hands folding. There is never a dull moment with this company.

Posted by phobos - 11 years ago

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Skyworks Solution (SWKS) up over 7 % today on good earnings and outlook. Revs up 13 % YOY, improved margins, increased income, and forward looking revs/earnings above street estimates.

A lot of ex-VTSS employees there must be so glad they jumped ship.

Posted by Techinvestor - 11 years ago

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CSCO misses big:

http://allthingsd.com/20131113/cisco-warns-that-2014-is-going-to-be-a-tough-year/

Will VTSS hit $27M, or will this be another "softness in China" conference call?

Then again, ALU had a relatively good third quarter:

http://www3.alcatel-lucent.com/wps/portal/newsreleases/detail?LMSG_CABINET=Docs_and_Resource_Ctr&LMSG_CONTENT_FILE=News_Releases_2013/News_Article_002933.xml&lu_lang_code=en

http://allthingsd.com/20131113/cisco-probably-took-a-hit-from-the-federal-shutdown/?reflink=ATD_yahoo_ticker

http://finance.yahoo.com/echarts?s=CSCO+Interactive#symbol=csco;range=1m;compare=alu;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

A very interesting development...CSCO is way down, but ALU is up dramatically...are the equpiment makers that traditionally served the carrier market taking market share from the networking folks? Interesting. This may be a neutral event for VTSS.

http://finance.yahoo.com/news/alcatel-lucent-ip-technology-key-140000851.html

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

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