Intelect Communications, Inc.

7/5/00

• Profile

Intelect Communications Inc., is an international communications technology and products company that designs, develops, manufactures, markets, and sells products and services for the integration of voice, data, and video networks. The company provides engineering design services to other telecommunications companies and designs and sells digital signal processing products. The Company's products include a multi-service access platform for fiber optic networks, digital signal processing system components, video communications equipment, and telecommunications system design and development services. The company's operations are conducted primarily through two wholly owned subsidiaries, Intelect Network Technologies Company (INT) and DNA Enterprises, Inc. (DNA).

The Company focuses its product lines and services to take advantage of the convergence of voice, data and video telecommunications services and to meet the requirements of Internet applications such as E-commerce. INT's operations consist of developing optical networking products, marketed as OMNILYNX, which serve various purpose-built networks. DNA's operations consist of providing digital signal processing for military applications, and engineering services for the semiconductor and telecommunications industry.

• Background

Intelect Communication's current operations were established through a series of mergers in 1995 and 1996. The Company's operations are conducted primarily through two wholly-owned subsidiaries, Intelect Network Technologies Company ("INT") and DNA Enterprises, Inc. ("DNA"). The Company is strategically focusing its product lines and services to take advantage of the convergence of voice, data and video telecommunications services. This convergence is being driven by the explosive growth of Internet applications such as E-commerce, which is accelerating the expansion of network capacities. These industry trends create requirements for today's network integrators and directors to manage multiple applications, at multiple locations, within bandwidth resources and while balancing the need for network reliability.

The Company's product lines are designed to meet these evolving markets, applications and requirements. The Company's objective is to develop and bring to market a new generation of intelligent, flexible, and scalable communications products designed to combine current voice, data and video networks i.e., telephones, computers, surveillance into a single communications network, which would also upgrade communications into the latest generation of high-speed technologies, while using a single network management system. 

• Divisions

Intelect Communications

Intelect Communications, Inc. is engaged in the business of designing, developing, manufacturing, marketing and selling products and services for managing digital signals and converging voice, data and video networks. Their objective is to develop and bring to market a new generation of intelligent, flexible, and scalable communications products designed to combine current voice, data and video networks (telephones, computers, surveillance) into a single communications network. Through this network, companies upgrade communications into the latest generation of high-speed technologies using a single network management system. They have strategically focused the product lines and services through their wholly owned subsidiaries, Intelect Network Technologies and DNA Enterprises, Inc., to allow you to take advantage of the convergence of telecommunications and data communications.

Intelect Network Technologies

Intelect Network Technologies, a wholly owned subsidiary of Intelect Communications Inc. (NASDAQ: ICOM), develops fiber optic access products that make public and private backbone communications networks operate efficiently and reliably. Organizations worldwide rely upon these networks to carry their voice, data network and video multimedia traffic. Intelect employs more than 140 professionals worldwide in product research and development, engineering, product management, sales, marketing, customer service, technical support and administration. Intelect Network Technologies has provided mission-critical communications switching systems to organizations around the world for more than 30 years. The company began designing air traffic control systems in the 1960s working on analog systems for air traffic control and air defense networks. As technology improved and needs changed, Intelect transitioned these systems to meet rising demand and capacity requirements to digital systems in the 1980s. Building on its experience in high-performance communications systems, Intelect moved toward a new business model in the early 1990s incorporating fiber optic networking devices as a product offering.

DNA Enterprises

DNA Enterprises, Inc. is an established engineering services organization located in North Dallas. The company offers comprehensive hardware and software design services to the telecommunications and signal processing industries, with expertise in switching systems, network management, video processing, and DSP. Their services range from concept evaluation, requirements development, architectural definition, and implementation to prototype generation, product test, and production. The cornerstone of DNA's business model is to couple proven technological capabilities with a rigorous development process that results in projects that are on-time, on-target, and on-budget.

DNA Enterprises Web Site

• Products

Optical Networking Products

The Company's optical networking business is conducted by INT. Marketed under the name OMNILYNX, formerly SONETLYNX and FIBRETRAX, the Company believes it has developed a revolutionary networking infrastructure product for public and private networks to cost-effectively create voice, data and/or video networks of virtually any size and application. It is defined as a platform because, from its basic architecture, it can be configured into many separate products for a variety of functions and applications.

Through the use of different protocol cards, the OMNILYNX can simultaneously combine multiple communication transmissions such as video and graphics communications, data files, voice and any IP-based service over a single network. The products are compatible with Synchronous Optical Network (SONET) and Synchronous Digital Hierarchy (SDH) standards in order to provide fail-safe networks.

The OMNILYNX products, in addition to providing add-drop multiplexing, provide the functions of traditional networking equipment such as bridges, channel banks, routers and video matrix switches, thus offering significant savings in cost and time for the user when OC-1, OC-3, OC-12 or OC-48 bandwidth is required. The OMNILYNX expands into markets horizontally by increasing the types of protocols (applications) it can transport, and vertically by increasing its capacity (transmission speed).

Currently, the OMNILYNX can transport voice, Fast Ethernet (10/100baseT), JPEG video and low speed data protocols such as RS-232 and RS-422 at speeds up to the OC-12 rate (622 Mbps). The OMNILYNX line is currently comprised of five different models as follows:

OL-10 - Copper based HDSL/SDSL, T-1, Ethernet customer premises device. OL-100 - Fiber optic OC-1 controller based premises access device. OL-300 - Fiber optic OC-3 controller based network infrastructure device. OC-600 - Fiber optic OC-3/12 controller based CLEC central office system. OC-1200 - (Under development). Fiber optic OC-12/48 controller based co-location system.

Engineering Services Through DNA, the Company provides advanced product and system design and development services for a variety of clients in the communications industry. The Company believes DNA is a leading contract and outsource development resource for the communications industry. DNA provides expertise in digital signal processing (DSP), switching and transport systems, computer telephony integration (CTI), embedded systems, data communications, intelligent networks, video processing, and wireless communications technologies. Digital Signal Processing DNA also provides state-of-the-art digital signal processing technology to systems developers around the world to afford them leading-edge solutions, faster time-to-market, and reduced technical risk for their product development programs. The Company has developed a product line consisting of standard designs for high performance circuit boards, and offers custom designed hardware, application support software, real-time operating systems, and consulting services to product manufacturers and application developers in the multimedia, image processing, communications, and remote sensing systems arenas. The bulk of the activities center around the Texas Instruments ("TI") line of digital signal processors and Power PC processors produced by Motorola. The primary market faces for these products are military applications, including commercial off-the-shelf (or "COTS") components.

Visual Communications During 1999 the company made the decision to de-emphasize its LANscape video conferencing product in order to focus on its optical networking products Certain engineering and development activities were completed during 1999 in order to offer the underlying technology in connection with the Company's optical networking products.

CS4 Intelligent Services Platform During 1999 the Company completed initial stage engineering and development activities related to the CS4 Intelligent Services Platform and successfully completed a beta test of the product. Upon completion of this beta test, the Company determined to cease further development activities related to the CS4 in order to focus its efforts and resources on its optical networking products. The Company has been exploring options for the further development of this product in cooperation with other entities. However, no such agreements have been reached to date.

• Manufacturing

Intelect Communications optical networking products, OmniLYNX, are currently manufactured, assembled and tested in the Company's own manufacturing facility. Such manufacturing facilities have been ISO 9002 certified. The Company believes that these facilities have adequately capacity to meet the Company's current and near-term product requirements. However, the Company is considering the use of third parties to perform certain of these functions in order to increase capacity and to potentially increase manufacturing efficiencies. The Company's digital signal processing products are manufactured by third parties and delivered to the Company for testing and delivery to customers. Raw materials are primarily electronic components available from multiple sources. Certain sole source components are not generally considered a vulnerability because they are reliably supplied by large companies. The Company sources a fiber optic interface card, for the OC-3 product, from a third party which is the sole source for the component. The Company also buys a video codec card, used in OmniLYNX video applications from a sole source.

• Management

Intelect Communications Inc., Management

Herman M. Frietsch  Chairman of the Board, Chief Executive Officer

Chairman of the Board since 1989; Chief Executive Officer since February 1997; Director since 1988; Executive Chairman from October 1995 to February 1997.

Robert P. Capps Chief Financial Officer, Treasurer, Executive Vice President

Executive Vice President, Chief Financial Officer, Treasurer and Secretary of the Company since 1999. Prior to joining the Company, Mr. Capps was Executive Vice President and Chief Financial Officer of Dynamex, Inc. since 1996 and Executive Vice President and Chief Financial Officer of Hadson Corporation from 1986 until 1996.

DR. Eugene Helms  Chief Technology Officer, Executive Vice President

 Executive Vice President, Chief Technology Officer since June 1996; President and Chief Executive Officer of DNA Enterprises, Inc. (a subsidiary of the Company) from April 1996 to September 1999; President and Owner of TeleSolutions Inc., a consulting firm, from January 1990 to 1996; Vice President, Engineering of Mizar, Inc., a DSP products manufacturer, from March 1994 to October 1995.

Corporate Financial Snapshot 

Approximate as of 7/5/00

• Corporate Contacts

Intelect Communications Inc.

1100 Executive Drive
Richardson, TX 75081

Phone: (972) 367-2100
Fax: (972) 680-1287

7/17/00

Disclaimer

This report was written by SmallCapReview.com and has not been paid for or approved by Intelect Communications, Inc. (ICOM). SmallCapReview.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. More information can be found by reading our disclaimer page. For continuing coverage of ICOM, please sign up for our free newsletter, SmallCapReview News. Information contained in this report was extracted from current SEC documents, particularly the Annual Report filed by ICOM and from other sources deemed reliable. This information was not supplied to SmallCapReview.com by the company and SmallCapReview.com has received no compensation from the company for this article. ICOM has not assisted in any form or manner in the gathering of information presented herein. For more information see our disclaimer section, a link of which can be found on the home page of this site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates.

 

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