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Dense-Pac Microsystems (DPAC) Message Board

  • m8kin_money m8kin_money Apr 12, 2001 2:19 PM Flag

    Dpac conference call notes:

    I listened in on the Earnings Conference Call 4/12/01 and here are my notes:

    Dpac Volunteered info:

    o They added 10 manufacturing Rep. firms to represent Dpac. Hopefully it will lead to more sales.
    o Last 3 months, 90 potential customers have been in contact with Dpac.
    o This quarter started strong, but fell off due to the economic conditions. Dpac is not isolated from the current economic conditions.
    o Dpac expects things to pick up later this year.
    o Dpac's system stacks are generating a great deal of interest, but no orders as of yet.
    o They have a clear understanding of the marketplace, and they are generating products targeting these customer needs.
    o Dpac's yearly revenue goal is to reach $150 million within the next 3 years. This past year they had revenue of $35 million.

    Investor Asked Questions:

    o Regarding the patent lawsuit against Dpac, and Dpac countersuit: Dpac is pleased with the progress and direction of the suit. They had no timetable for court or when it would be wrapped up. They would not comment further.
    o The 500,000 Share Buyback: Dpac is keeping their capital at the moment because of the current economic conditions. They have repurchased some shares around the $2 level, and spent around $10k so far.
    o Demand for Dpac products has been reduced because of other companies excess inventories, that need to be worked off.
    o Design activity of other companies is strong, companies are not pulling back because of economy.
    o Dpac has experienced an increase in requests of their samples. Price quote activity is strong. They have a 300% increase over previous quarter in RFQ. (I'm not sure what RFQ means.)
    o CEO Ted Bruce is excited about the Long Term of Dpac, and they are expanding penetration into other companies products and offerings.
    o Dpac does not announce new customers, because customers request anonymity for competitive reasons.
    o The sales force is very actively working with customers and their needs.
    o Operations and Manufacturing yields and efficiencies are improving.
    o Euroventures (a large shareholder) has approximately 4 million shares currently. They see value in the future of the company and are holding.
    o The Design Group in Laguna will stay put. They work well in that building and Dpac does not want to disrupt their workflow and interaction.

    Questions I asked:

    o Last quarter 15 companies audited the Dpac facilities. Did any new customers become Dpac clients?
    o Does the lawsuit effect just the stacking of memory, or does it also pertain to Dpac's new stacked DSP, DDR, and mixed IC stacks?...It only pertains to the stacking of memory, and not the newer product stacks.
    o Any new products on the horizon in the next 6 months?...Its possible.
    o Last quarter Dpac mentioned that the new products would be adding to revenues by the end of this year. Is this still the case?...YES
    o Regarding share buyback, if the price drops below $1 the Nasdaq could possibly delist. Does Dpac plan on doing a reverse split if that was the case, to prop up the share price and stave off delisting?...Management stated that contingencies are in place for that scenario, and that a reverse stock split is NOT an option.
    o Regarding layoffs. Management stated they cut back non-critical positions, but hired people for other positions deemed important.
    o Thomas Weisel covering firm dropped coverage of Dpac because their management decided to drop all companies with less than $100 million in market cap.
    o Regarding coverage. They are looking and engaging into other possible covering firms.
    o Guess as to when a turnaround may occur. Management stated later this year. Customers have to work through their own inventory challenges.
    o Research and Development is running 4-5% of revenues.

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    • M8kin money, thanks for the conference notes. I am still holding Dpac, but unfortunately bought higher and rode it down. Have been thinking about averaging down here, but seems to still be a risky proposition, even at this low price. Again, thanks for the update. DP2

    • made to document that summary is greatly appreciated.

      I'm not happy about the loss but I do understand it and accept it. I think that the economic conditions were the main contributor but I'm also convinced that the ongoing legal fees to defend their memory stacking patent continues to take its toll on the bottom line. I wish that could be behind us now but it looks like more waiting.

      I was pleased to see that the market reaction was almost none and that indicates to me that we are finally at the bottom. I agree with Fan that we just need the market to cooperate with us know and better times will come down the road.

      Patience is a Virtue,

    • Ted has always been conservative. In fact ultra conservative. I can't emphasize what growing this into a 150 million dollar company in 3 years would do for this stock. If the market doesn't tank next week should be a good one for the pac. I am encouraged.

      • 1 Reply to Fanofstan
      • disappointed. Having the benefit of 20/20 is now 6 pm est. and I have just reviewed all of todays posts. Disappointed at the lack of market acumen exhibited by some. DPAC does NOT operate separate from the rest of techland. If you were expecting a bang up qtr. you don't have a real grasp on reality these last few months. I hope some that lost it this am will learn something.

        To those of you that showed calm this morning, my hat is off to you. This is indeed the real world. We have been operating in (WSJ comment) the worst chip climate ever and we emerged with a profit for the year. There are those that feel that the inventory glut is coming to an end. If we came thru this period with a couple bad months I'd say we "DONE GOOD".

        This company is EXTREMELY well managed by forward looking management. I'll stake my bet on $150,000,000 in 3 years.

        Looking forward not backwards...ADOBE

    • thanks for the summary

    • M8kin:

      Thanks for the notes. Just got back to the office and am pleased that there are investors preventing a possible slip in price. Obviously the current price had all the economic bad news factored in. ( DPAC suffered due to the economy ).

      RFQ= Request For Quote.

    • Thanks...a very nice overview of the call.
      Did anyother chip manufacture have a sales increase last quarter, or is DPAC the only one?

      Thanks again

    • RFQ - Request for Quote.

      RFP - Request for Proposal.