Saturday, May 01, 2010

Tessera On-Track to Get $100M in Imaging and Optics in 2011?

Seeking Alpha published Tessera Q1 2010 Earnings Call transcript with few interesting questioons from analysts:

C J Muse - Barclays Capital:

Hank, you’ve got the Imaging & Optics now close to a $40 million run rate. Your announced target for ‘11 is $100 million and you discussed some really nice traction across multiple areas?

Hank Nothhaft, CEO:

C J, thanks for your question. I’m not in a position to provide a forecast for the second half but I would like to adjust your question seriously. Yes, I mean, as you can imagine, it is a challenging goal to reach $100 million in revenue in 2011, and there’s significant risk involved.

To be honest, if you asked me today rather than a number of quarters ago to initiate, say, $100 million in revenue in 2011 as our goal in the I&O business. I’d have to think long and hard about it, due to the amount of growth required to get there as you pointed out.

But, however, we’re not in a position yet to know whether we will be successful in implementing our plans to reach this aggressive goal. So, we’ll have more visibility later in the year and I’ll readdress it at that time.

Krish Sankar - Banc of America:

...following up on the Imaging & Optics target for next year. Is it safe to assume that if you can get more licensees to sign off on your Zoom technology, which has a much higher royalty per unit rate, would it be fair in assuming that then you could put in to the immediate target or you need -- more needs to happen beyond just like Zoom taking off?

Hank Nothhaft:

...Zoom is certainly an integral part of our program to reach our goal. But to make the $100 million goal happen, we have to execute on a number of fronts.

...our licensees that are producing product in both the packaging areas, wafer or sensor packaging and also in creating wafer-level optics lenses, have to continue on schedule, come on stream in time. We need the complete development of our 3 megapixel wafer-level optic lens on schedule.

The last call we had, I mentioned that we needed to wrap up development of the 3 megapixel wafer-level lens by the end of the quarter ending in March and get it into our production level services, so that in the third quarter we could start turning it over to licensees.

We did in fact meet that schedule within a week or two and we now have that lens in our production level services, working out the final kinks in order to get it to where it can be manufactured in high volume and turned over to our licensees.

Our EDOF programs that we’ve already won, the OEMs and members of the supply chain that have given us forecast for volumes that we bid against, they need to meet their forecast, ship on time and meet their schedules as well as us.

We need to sign up some Zoom customers this year and go into high-volume shipment next year. And we need to continue to promote and extend the image enhancement product range into the mobile platform technology.

And then, a couple contracts that we’ve actually acquired, which have very high potential for volume in 2011, we need to be able to meet our development schedules. There’s technology risks and if we’re able to do that and actually complete the development on schedule then our customers need to meet their volume schedules. If all that comes together, I mean, there is a lot of moving parts, but completely manageable, then we’ve got a real shot at coming within range or exceeding the $100 million revenue in 2011.

Krish Sankar - Banc of America:

...Not to beat a dead horse but this -- at what point will you feel comfortable even like, I think the number (inaudible) of $100 million or resetting the guidance expectations lower, will it be at sometime in the second half when you get more clarity in how the business is progressing or would you have to wait until the end of the year?

Hank Nothhaft:

Okay. That’s a fair question. We’ll know before the end of the year. I would say end of third quarter or early fourth quarter, the good news or the handwriting will be on the wall, depending on what the case maybe. And so, we’ll be very transparent and we’ll keep you informed as to how we go. I think that’s as much as I can really say about it.

1 comment:

  1. Tessera will acquire Siimpel according to today's press release.


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