-Netapp for the first time in many years is not their biggest customer. IBM is.
-Margins and HDD spend really coming back well after the last couple quarters.
-Another tier 1 OEM starting in mid-year and Hitachi-LG just qualified as well.
-OEM headcount falling with Netapp but Clusterstor reps on the increase. These new reps are both training and making the sales pitch alongside the Dell/HP/Cray reps etc. That's a first for XRTX and an indication of the more advanced technology involved.
-They'll be announcing both a new Big Data appliance soon as well as their new Pentaho Business Analytics appliance soon
-Stated there is excitement in the market regarding the above appliances and are already getting preorders. Mentioned that margins on these would be 35%(?). Clusterstor 2013 guidance $60M+
Nothing too surprising. It seems to me they are managing both the restructuring and launch of the 'new hi-tech Xyratex' really well. 2014 looks to be a big year. Also, reading between the lines I kind of thought Pearce, who is effectively running the company now, implied they wouldn't consider anything below $20 offer and that the Baker St relationship was a healthy, collaborative one.
Ben, not that it matters but do you really think other than being politically correct, management is happy with Baker Street? The bottom line is management made all the right decisions and did a good job preparing for the future and if you read what Baker Street said, about those "unknown technology's", well everyone seems to be excited now that they are going to sell Xyratex. Management is top notch and if one rewarded themselves on the board for bringing the company forward to success, then they deserve way more than someone who uses the power of money to reward themselves even bigger than those who work hard to bring you to those positive remarks you make about earnings.
All of this because Xyratex lost a huge customer(netapp) and has already filled the hole and built a stronger foundation for the future. Now we all benefit no matter what cause we all loaded up the cheap shares, but Baker Street is simply going to take credit for management's hard work...IMO
Lets face it, the stock is still under $11 and no float available to the common investor. The MM should place the stock at 14.20 this morning based on conversation but they want. They know if they do institutions will unload big time.
They are all wrong, Xyratex is worth $28 a share and that is a huge discount today for a stock that will be worth way more than that down the road.
Baker street could of waited 1 more year and made $57M more off their investment...IMO
But the analyst is right, with facts known today management could be forced to sell company for 14.80, that's all its worth "according to baker street" since they invested so much money in "unproven technology" The reality is, just because STX or other company is looking to acquire Xyratex, they aren't going to pay a premium today just to make current shareholders rich, they can give management a better deal
As investor's, everyone but Baker Street, we might be robbed of our gravy and get a smaller piece of the pie.
I agree there is a PCishness going on but it is what it is and Baker St owns a quarter of the company and are now "insiders". I didn't listen but read the txscript. And again, reading between the lines with a lot of room for error on my inferences, I got the sense that Baker St wrote the original letter as outsiders and now that they are insiders seeing the strong momentum that the R&D is creating within the HPC/Cloud/Big data storage solutions markets, that there may be more room for a wait and see approach on the part of Baker St. And it wasn't just the Storage Solutions, HDD spend is coming back pretty strong it sounds. 80% of all of 2013 HDD projected revenues have already been booked by end of Q1; this is the fastest that has ever happened according to Pearce and those margins will be a healthy 30%.
Thanks for your overview. They sounded (as did the analyst questioners) decidedly upbeat. "If someone came in with a $20 offer...then the committee would have to look at it..." or words to that effect, does give us an idea of what XRTX/Baker Street think XRTX is worth...hopefully they see an upgrade or two on improving outlook.