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Tuesday January 9, 4:32 pm Eastern Time
Press Release
SOURCE: Applied Innovation Inc.
Applied Innovation Ends Year with Record Revenue and Earnings
Company Reaffirms Near-Term Outlook
DUBLIN, Ohio, Jan. 9 /PRNewswire/ -- Applied Innovation Inc. (Nasdaq: AINN - news) announced today that it expects to report record earnings and sales for its fourth quarter ended December 31, 2000. The Company said that net income for the fourth quarter 2000 should increase more than 25% compared to fourth quarter 1999 net income of $2.5 million. Driven by strong growth in demand for products, software, services and systems integration, sales for fourth quarter 2000 are expected to exceed $50 million, as compared to $14.4 million a year ago. A substantial amount of the sales growth has been driven by systems integration revenues, which include the integration of third-party equipment with the Company's own products to provide turnkey system solutions for our customers. While systems integration sales have had a significant effect on top line growth, the gross margins achieved on such sales are much lower than the Company's products and services.
Audited results for the year-ended December 31, 2000 are scheduled to be released in February, 2001.
``As a result of strong demand for our new AIscout(TM) product and systems integration services, as well as continued strength for our existing products, we expect to post our best-ever fourth quarter and full year's performance,'' said Robert L. Smialek, President and CEO. ``Even during a year of rapid growth, cash flows remained strong, and we ended the year with over $25 million in cash and investments, and equally important -- no debt. The record performance is the result of our strategy to expand our markets by delivering a total package of products, software and services to assist our customers in the successful deployment and management of their complex networks.''
``Looking forward to 2001, we do not currently anticipate that recent spending cutbacks by major service providers, especially CLECs, will significantly impact our product business nor our service business. To date, our major CLEC customers remain financially strong. Furthermore, our traditional customer base of ILECs and other large service providers continue to demonstrate solid demand for our products, and product orders received in December 2000 remained strong. During 2000, our systems integration business grew much faster than expected, due largely to an aggressive DSL deployment schedule for one of our customers. Our personnel performed extremely well, managing a complex, high-volume integration project with very short delivery schedules, and thereby speeding deployment times for our customer. The unusually high volume of systems integration services that were achieved during the second half of 2000 are unlikely to continue, and absent similar unusually large deployment projects, systems integration revenue will most likely decline in 2001. Nonetheless, we anticipate that growth in our higher margin products, software and services businesses will mitigate any potential earnings impact caused by a slowdown in the lower margin integration services.''
Smialek concluded, ``We remain optimistic about the potential that our recently formed LuxPath Networks, a division focused exclusively on high-speed optical Ethernet transmission products, brings to Applied Innovation. Optical Ethernet networking is a very cost-effective approach to dealing with the phenomenal growth of traffic demand in today's networks. With the expectation for slower economic growth in 2001, our customers will be looking for the most cost-effective means to deliver high-speed broadband connectivity, particularly in the metro-access market. We believe the products under the LuxPath Networks banner provide significant time-to-market and cost benefits and, as such, we will be aggressively marketing the capabilities of this new division in 2001.''
About Applied Innovation
A leader in the design, manufacture and deployment of state-of-the-art communications management networks, Applied Innovation (AI) products provide critical network care functions for nearly every major service provider in the U.S. These systems enable centralization and simplification of the management of thousands of geographically dispersed network elements, which utilize a multitude of disparate industry protocols. Applied Innovation products exist in wireline, wireless, Internet, data and video communications services. AI recently announced the formation of LuxPath Networks ( www.luxpath.com ); a division focused on the development of broadband Ethernet aggregation and transport products. Headquartered in suburban Columbus, Ohio, Applied Innovation is traded on Nasdaq-NMS under the symbol AINN. For further information about our products and services, please visit us at www.aiinet.com or call 800-247-9482.
About LuxPath Networks
LuxPath Networks helps customers make the most of the Internet with high capacity, carrier quality fiber optic data transmission solutions. For more information about LuxPath Networks, visit www.luxpath.com , or call 1-877-781- 4900. LuxPath Networks is a division of Applied Innovation Inc.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts, and plans of the Company and its management, and specifically include statements regarding corporate earnings and revenue performance (paragraph one and three); the impact of industry spending slowdown, including CLECs (paragraph 4); and product, software and services growth helping to offset decreases in systems integration (paragraph four). These forward-looking statements involve numerous risks and uncertainties, including, without limitation: the Company's ability to generate sales orders during fiscal 2001, the acceptance of the Company's present products and its ability to develop new products as planned and on budget, the impact of competitive products and services, the ability to hire technical staff, the Company's ability to adapt to technological changes, the availability of capital to fund our customers' network deployment plans, and other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings, including the Company's Annual Report on Form 10- K for the year ended December 31, 1999. One or more of these factors have affected, and could in the future affect, the Company's business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company, or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
SOURCE: Applied Innovation Inc. |
