Mark,
I came across this on the Yahoo board. It is supposedly comments made from the CEO of INVX. At the end of the post the author states who he believes was the source of the comments. Anyway here it is:
Top:Business and Finance:Stocks:Technology:Electronic Instr and
Controls:INVX (Innovex Inc)
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Subj: CEO's comments Date: Dec 11 1997 6:47 P.M PST
By: Iseekvalue Reply To: Msg. 1 by
YahooFinance
This is a very long post but I thought you might be
interested...
FYI....A few quotes from Thomas W. Haley, INVX CEO on
11/25/97:
"A year ago in May, we acquired a company called Litchfield
Precision Components. The company makes ultra high end flex
products, specifically for the medical and the disk drives
industry. They have cutting edge technology. I have been told
that there
are only two other facilities in the world that can duplicate
the type of flex circuits they make at IBM's Rio plant and
the 3M plant in Missouri and Texas. This company is terribly
important to us, doing about $14 million last year out of a
$2 billion worldwide market for flex circuits. There is
probably only 25% of that that we would go after because we
like the high end of the market. That market is expected to
grow to $5 billion by the year 2000. We have great plans for
it.
"The other two divisions are medical products divisions
called InnoMedica and Iconovex, which is our software that we
bought from the people who developed it. Each of these
divisions, I should point out, cost us about $150,000 per
month last year, for
a total of $300,000 per month right off the bottom line of
the company. The good news is that the medical products
during this quarter that ended in March was actually
profitable, all be it tiny, but our budget for the year of
$200,000. "We believe that next year it will be profitable
and start contributing as to leading to our bottom line. The
software division was either a home run or a pop fly. From a
revenue standpoint it is more of a pop fly right now.
"Right now probably 70% of our product goes to the Pacific
Rim. It is generally to American companies, although we have
a Japanese and Korean customer base so we basically right now
sell to every pin chrome head manufacturer in the world.
"The only thing, since we have a pretty ambitious program
going forward, that we would look at would be something that
would compliment our flex circuit operation. Someone that has
a technology that is unique and that served a market that we
are trying
to get in. That might be a special chip packaging type
company that has some expertise and maybe a lead in what we
believe is going to be a very down swing portion of that
market. That is about the only thing we would look at in way
of an acquisition.
Continued.......
This is a very long post but I thought you might be
interested...
FYI....A few quotes from Thomas W. Haley, INVX CEO on
11/25/97:
"This HIF has certainly been announced and I think it has
been kept pretty secret. We did a road show to a variety of
institutions in four cities on the East Coast, Philadelphia,
Baltimore, Boston and New York. We were telling them about
this product, and telling why we felt that it was a superior
solution to what is the disk flex problem, and that is the
tremendous amount of labor to hook up the back end of a MR
head."
One of the main things about Innovex is that our marketing
expenses is one of the reasons our margins end up being where
they are, probably run less than 2% of sales. When there is
only fifteen known customers in the world and you supply all
of them it doesn't take an awful lot to keep the forum
particularly when you have 70% of the market, and supply the
lions share to almost every one of them.
We manage the business to a certain gross margin objective.
We tend to want to pass on over and above that. We had a
quarter that we are probably going to have higher than normal
margins simply because the demand is so strong. We will
strategically work
that down. It has always been our policy that as we improve
our process and save money part of it goes to our customers
and part of it we get to keep. Improving what is already
probably the highest margins in the industry, that is not
necessarily our goal. To maintain our marketshare and to
maintain the overall interconnect marketshare is our goal.
Certainly everything looks pretty rosy right now, but the
disk drive industry in the past has been known to have high
volatility we have been insulated from a lot of that. This
volatility has generally been in the profits and sales
regions. Certainly
if there is a market turn down at some point in time we have
to make sure that we are not building capacity unless we are
aware that it will be short lived. Often times these things
are two quarters. Our strength in the past has been to have
capacity in place when it was required, which is why we are
probably going to have a doubling in sales this year.
If you look at the group we, are the most profitable and have
been for many years. Our stock prices skewed a 98% over a
year-compounded rate of growth. We have one of the best Dow
Jones sheets you will ever see for a company our size. We
have virtually
no debt, $30 million cash in the bank. We earn more money
than most of the people who own businesses. I would say we
are a growth company, growing at a multiple." The simple fact
is that we are going to be a cheaper solution. The disk drive
industry likes cheap.
It was sent to me, I think it came from a publication called Wall Street Corporate Reporter, but I'm not sure.
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