Network Equipment Technologies F2Q08 (Qtr End 9/28/07) Earnings Call Transcript

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2007-10-31 17:33:32.0

Tags: Network Equipment Technologies Inc.

Question-and-Answer Session

Operator

(Operator Instruction) At this time there are no questions in queue. I would now like to turn the presentation back over to Leigh Salvo for closing remarks. Pardon the interruption, we do have late questioner.

Nick Keating

Go ahead Michael.

Operator

And our first question comes from the line of Michael Prouting with 10-K Capital. Please proceed.

Michael Prouting - 10-K Capital

Yeah, good afternoon and congratulations on another good quarter. John, as far as the DSOs are concerned, what's your outlook for DSOs going forward at this point?

John McGrath

Yeah, our target is between 60-70 days. That hasn’t changed in the six years that I have been with the Company. This quarter hopefully it won’t change out of that range. We've been lucky that we've been very linear in the past year with our shipments. But it could be impacted slightly by the timing of the some of the orders with our new contract manufacturer. But we set our goal to be between 60 days and 70 days.

Michael Prouting - 10-K Capital

In the list linear quarter, this past quarter than the prior quarter, was that a function of the transition to Plexus, was that mix issue between government and commercial or what was it that drove the line?

John McGrath

Our business right now is continuing as it has for the last year to six quarters. What happened in the transition as you obviously have to move all of the existing inventory from one location to the other and it takes a period of time to get it ramped up. So, it’s all a function of the timing to ramp it up as opposed to the business which is very much on track. Nick, did you want add anything?

Nick Keating

No, I mean, up to now we provided some revised guidance when we had our call on Friday. We have upped our revenue for projections for the rest of the year based upon the visibility that we have both from a backlog standpoint as well as new orders that we expect to come in. So, unless there is a significant change in the visibility that we have, we feel pretty comfortable with what we have seen now, from orders and backlog and pipeline standpoint for the next six months.

As John indicated, the big challenge is getting the manufacturing up and ramped to the levels to sustain the order rates right now. But we have done the Plexus ramp up in two phases. We started first with VX manufacturing, the NX5010 and the NX1000 and they were the first to begin production at the Plexus facility before the end of the quarter. So we saw product coming out of there in September.

 

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