Dan - posted below is a story about Bay Network's earnings, and resignation of CEO. Any idea what impacts (if any) on MRVC?
BW0177 OCT 14,1996 13:36 PACIFIC 16:36 EASTERN
( BW)(BAY-NETWORKS)(BAY) Bay Networks Announces First Quarter
Results/Shift in Top Management; Chairman Severino Assumes
Role as Acting CEO; Andrew Ludwick Continues Role in Company as
Director
Business Editors/Computer Writers
SANTA CLARA, Calif.--(BUSINESS WIRE)--Oct. 14, 1996--Bay
Networks, Inc. (NYSE:BAY) today reported revenue of $522,654,000
million for the first fiscal quarter ended September 30, 1996.
Net income for the same period was $5,625,000, or $.03 per share
and included a one-time charge of $42,648,000 in connection with the
acquisition of LANcity Corporation in September. Excluding this
charge, net income would have been $48,273,000 and earnings per share
would have been $.25.
The company also announced that Andrew K. Ludwick has resigned
as Bay Networks' President and CEO. Paul J. Severino, Bay Networks'
Chairman, will assume the position of acting CEO, pending the
completion of a search for a permanent successor that is already
under way. Mr. Ludwick, who has been Bay Networks' president since
the company was created by the merger of SynOptics Communications,
Inc. and Wellfleet Communications, Inc., in 1994 will continue to
actively serve Bay Networks as a member of the Board of Directors and
is one of its largest individual shareholders.
Mr. Severino, commenting on the management news, said, "Andy
Ludwick led Bay Networks through the tough organizational challenges
that followed the merger and built the foundation that will enable
Bay Networks to compete effectively in the future. We are grateful
for his enormous contributions as CEO and look forward to his
continued guidance as a member of the Board."
Mr. Ludwick said, "At this two year mark in Bay Networks'
growth, we have completed a key phase of our integration as a merged
company. We've fully integrated our organization -- field staff,
operations and our business units. We've integrated our technologies
-- core switching, routing and network management products. And,
we've doubled the size of the business. The Board has agreed with my
recommendation that now is the appropriate point in Bay Networks'
progress to make this change and prepare the way for our future."
In the interim period, Mr. Severino will focus on the CEO search
as well as continued delivery of the company's product lines and
customer service. "We have a rock-solid core that encompasses our
leading-edge technology, the breadth and depth of our product line,
our substantial installed customer base of over 31 million
connections worldwide, our sizeable financial reserves, and a
valuable employee base," Mr. Severino said. "We will leverage
these strengths with new product offerings and a disciplined approach
to building new business in high-growth market segments."
First Quarter Highlights
In the first quarter of fiscal year 1997, Bay Networks continued
to announce and initiate shipments of new products in major market
segments. During this period, Bay Networks introduced the 5000BH
platform, which brings Centillion technology into its System 5000
platform. This backbone ATM core switch allows connectivity to
Ethernet, Fast Ethernet and ATM. At the edge of the network, the
BayStack 301 desktop Ethernet switch, introduced October 7, provides
high-density, low-cost desktop switching for high-bandwidth desktop
and workgroup environments. Bay Networks also extended its router
product line with the announcement and availability of the BayStack
Advanced Remote Node (ARN) branch office router. This product offers
an elegant solution for branch office environments that require
multi- protocol capabilities as well as optimized wide area network
(WAN) usage.
Also in the first quarter Bay Networks announced and completed
the acquisition of LANcity Corporation, Andover, MA. LANcity, the
pioneer and leading vendor of data over cable TV modem technology,
provides Bay Networks with a unique position in the emerging cable
Internet marketplace. This acquisition also reinforces the company's
strategy to deliver access solutions for telecommunications
companies, service providers and cable operators.
This release, other than historical financial information, may
consist of forward-looking statements that involve risks and
uncertainties. These statements may differ in a material way from
actual future events. For instance, factors which could cause
results to differ from actual future events include rapid rates of
technological change and intense competition, among others. Readers
are also referred to the documents filed by the company with the
S.E.C., specifically the last reports on Form 10- K and 10-Q which
identify important risk factors for the company.
Bay Networks, Inc. is a worldwide leader in the internetworking
market, providing a full line of products that serve enterprises,
small offices and mobile workers. The company offers market- leading
LAN and ATM switches, hubs, routers, remote and Internet access
solutions, and Internet access solutions, and network management
applications, all unified by the BaySIS architecture. With revenue
of $2.1 billion over the past fiscal year, Bay Networks markets and
supports its products around the world, providing 7x24 support
coverage. Bay Networks' World Wide Web address is:
baynetworks.com.
-0-
Note to Editors: All Bay Networks press releases are available on
Bay Networks' web site at baynetworks.com or via
CompuServe using GOBAYNET. Bay Networks' web site also provides
information on the company's products and services, news and events,
partner programs, and corporate contacts.
Centillion, System 5000, BayStack and Advanced Remote Node (ARN)
are trademarks of Bay Networks, Inc. Other brand and product names
are registered trademarks or trademarks of their respective holders.
-0-
*T
Bay Networks, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended
September 30,
1996 1995(1)
Revenue $522,654 $457,773
Cost of sales 249,915 206,210
Gross profit 272,739 251,563
Operating expenses:
Research and development 54,954 48,816
Selling and marketing 128,215 92,984
General and administrative 19,575 17,393
In-process research and
development 42,648 --
Total operating expenses 245,392 159,193
Income from operations 27,347 92,370
Net interest income and other 6,025 8,400
Income before provision for income
taxes 33,372 100,770
Provision for income taxes 27,747 37,602
Net income $5,625 $63,168
Net income per share $0.03 $0.32
Weighted average common shares and
equivalents 196,345 196,803
Condensed Consolidated Balance Sheets
(In thousands)
September 30, June 30,
1996 1996
Assets
Cash, cash equivalents & short-term
investments $451,927 $434,157
Accounts receivable, net 294,204 320,892
Inventories 214,736 239,725
Deferred income taxes 74,878 74,320
Other current assets 65,394 48,615
Total current assets 1,101,139 1,117,709
Investments 167,934 154,064
Property and equipment, net 231,243 211,674
Other assets 32,392 23,088
Total assets $1,532,708 $1,506,535
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $256,941 $250,246
Accrued income taxes 23,591 4,818
Deferred revenue 49,681 46,629
Total current liabilities 330,213 301,693
Long-term debt 110,080 110,147
StockholdersO equity 1,092,415 1,094,695
Total liabilities and stockholders'
equity $1,532,708 $1,506,535
(1) Amounts for prior period have been restated to reflect the
merger of Xylogics, Inc. in a pooling of interests transaction
effective December 15, 1995. |
