Milpitas-based Dialogic Inc. announced Thursday that it has signed securities purchase agreements with a group of its largest shareholders and their affiliates to rid itself of a large chunk of debt. The crux of the agreement states that Dialogic will issue purchasers “convertible notes” totaling $39.53 million, in exchange for debt and term loan pre-payment premiums. The convertible notes will be converted into common shares in Dialogic upon stockholder approval, which is expected at the June stockholder’s meeting. Upon the conversion of the convertible notes into common shares following stockholder approval, the company expects to reduce the principal of its long-term debt held by Tennenbaum Capital Partners, LLC and certain of its affiliates from $92.83 million to $59.88 million, to eliminate its related party long-term debt of $5.07 million, and to increase its common shares outstanding from 31.48 million to approximately 71.45 million. Consistent with the reduction in debt, Dialogic expects to reduce its 2012 quarterly cash interest by $2.6 million, or $10.6 million annually.
Forbes.com issued a subjective earnings preview for Milpitas’ Linear Technology this week, and it wasn’t much to get excited about. A year ago, the manufacturer of analog integrated circuits reported a profit of 62 cents; this time around, as the company shares its third-quarter results on Tuesday, April 17, analysts are predicting a profit of only 42 cents. Linear Tech has seen a dip in revenue for the past three quarters in a row and, over the past three to four months, has only climbed from 41 cents to 42. In its second-quarter results, the company announced profit had fallen by nearly 39 percent, falling considerably from the first quarter, when losses were 21 percent. Linear Tech’s biggest competitors are Intersil, Analog Devices, Maxim Integrated Products and Texas Instruments.
Unfortunately, the earnings forecast also looks cloudy for Milpitas-based SanDisk, who saw its shares plunge last week after reps adjusted the company’s first-quarter revenue projections to lower than expected, due to “weaker demand and prices.” Previously, the company had projected revenue of $1.3 to $1.5 billion, and analysts had backed that up with predictions of $1.34 billion. Last week’s adjusted expectations indicated only $1.2 billion is expected. SanDisk’s shares had risen slightly earlier in the day, before the announcement was made, but then dropped approximately 7.1 percent in after-hours trading. SanDisk is a provider of memory chips for smartphones, tablets, cameras and the like.
Networking giant Cisco Systems, the largest employer of workers in Milpitas, has reportedly joined hands with Sunnyvale-based NetApp to introduce a new cloud product, which is expected to help more customers accelerate their transition to the cloud. The companies recently announced plans to extend the FlexPod with a series of new pre-validated design architectures priced and sized for smaller workloads. The entry-level flexpod – best suited for companies that have between 500 and 1,000 users – has gained in popularity since the two companie first joined forces to introduce the flexpod in November, 2010. Usage is up an impressive 400 percent.
In other Cisco news, one financial analyst is advising investors to “think bullish” about Cisco stock these days. Mel Daris said this week that, even though in the past he tended to regard the networking and communications leader as a company that “holds so much promise and yet so much risk,” Cisco’s second-quarter results impressed him – particularly how the company has managed to cut costs significantly, raising its cash and cash-equivalent holdings and keeping its level of debt remaining steady, rather than climbing. Cisco’s revenue was up 2.4 percent last quarter, with net income rising 23 percent, and Daris thinks that trend will continue moving upward in the near future.