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OmniVision Technologies, Inc. Message Board

  • jimsearchingforprofits jimsearchingforprofits Mar 3, 2005 6:05 PM Flag

    Why are people making such a big

    negative deal about the increase in inventory when it's really a positive sign since 2/3rds of it is work in progress according to Peter Leigh? The inventory number was $66.864 million but only approximately $22-$23 million was finished products which based on a midpoint sales estimate for the April quarter of $98 million, this is only a 20.4 day inventory of finished product. Realize if the company doesn't have finished product it will lose sales.

    Further the company is currently introducing a number of new products so this in itself requires more production and more finished product just to have the same average amount of any one item. It should also be noted Leigh made the point that the finished items were essentially new generation products.

    Additionally last quarter everone saw the big limitation facing the company was insufficient supply of new products so I can't understand why people here don't want to see lots of work in progress moving through the system particularly when the average gross margin is so high (around 40%) and Leigh said they expect these kind of margins to continue?

    I know if I was running OVTI and I had a lot of cash in hand earning a few percent a year and I knew my average gross margin was 40% I sure would build enough to grab as much of the market as possible. Seems like some people are getting this backwards.

    At the same time no one can predict the future with any certainty so I would be very conservative in my forward estimates of sales and earnings and it seems like wisely the company did exactly that on Monday. They've does this over and over again in the past and just maybe the past is an obvious clue that they did it again? Wouldn't you do the same thing?

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    • I see you have joined golf fuck, a fool
      and his money is soon parted.

    • c'mon. order mostly comes in during the last month of a quarter, not evenly across the 3 months.

    • "I'm saying if Leigh spent full time on it he still wouldn't be able to predict the future."

      Man, please tell me you don't believe this!

      These guys are 1/3 of the way already done with the quarter they were forecasting. They must have a backlog and production plan. Generally, customers can do little to stop shipments 30 days out, so they are locked in for 2/3 of the quarter (through March). This means he needs to forecast one meager month (April)! If he cannot do this, he should be fired!

      Most likely, he is a puppet to Mr. Wrong (oops, spelling should be "H"ong) and is being told what to say.

    • courtesy of jimsearchforprofits:

      negative deal about the increase in inventory when it's really a positive sign since 2/3rds of it is work in progress according to Peter Leigh? The inventory number was $66.864 million but only approximately $22-$23 million was finished products which based on a midpoint sales estimate for the April quarter of $98 million, this is only a 20.4 day inventory of finished product. Realize if the company doesn't have finished product it will lose sales.

      Further the company is currently introducing a number of new products so this in itself requires more production and more finished product just to have the same average amount of any one item. It should also be noted Leigh made the point that the finished items were essentially new generation products.

      Additionally last quarter everone saw the big limitation facing the company was insufficient supply of new products so I can't understand why people here don't want to see lots of work in progress moving through the system particularly when the average gross margin is so high (around 40%) and Leigh said they expect these kind of margins to continue?

      I know if I was running OVTI and I had a lot of cash in hand earning a few percent a year and I knew my average gross margin was 40% I sure would build enough to grab as much of the market as possible. Seems like some people are getting this backwards.

      At the same time no one can predict the future with any certainty so I would be very conservative in my forward estimates of sales and earnings and it seems like wisely the company did exactly that on Monday. They've does this over and over again in the past and just maybe the past is an obvious clue that they did it again? Wouldn't you do the same thing?

    • inventory vs. guidance

      No one knows well about future sales 3 months out, but company know exactly its current sales (hence the inventory to meet it).

      No point to boldly predict too far out.

      Inventory represents the company's most intelligent prediction of the forseeable future. That's a prediction, backed up with real cash.

    • You an employee pissed that the company is screwing up? Must be.

      You are right on inventory, wrong on the guidance. They don't know their business, or they would not give such a broad range. They should know within $5-7M, and should guide to the high end unless they are confident they will miss. Truth is, the don't know, which shows that they are not all that smart.

    • I cudn't agree more with your post. OVTI is going down because of the 25% shortinterest, not because of the CC or the fundamentals. If the SEC would really step down on naked shortselling, which is illegal by definition, OVTI investors would not be robbed by the hyena's of this world. Pity, that weak hands cant see all this and keep whining over the management. For me, the longer term outlook is still just fine. So no one will rob me of my shares. Stay long!!!

    • They've does this over and over again in the past and just maybe the past is an obvious clue that they did it again? Wouldn't you do the same thing? ..

      I agree with your sentiment and alot of what you say, however at some point they got to set the bar higher and hit that. That is what makes Wall Street happy. Don't preach growth while projecting flat revs. Talk the talk a little especially if you can walk the walk.
      They need to show some agressiveness here. Don't you think that helps your customers feel confident with you as much as money in the bank???
      They got enough honey to spread a little sugar our way too, we should matter.

 
OVTI
26.67+0.26(+0.98%)Dec 17 4:00 PMEST

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