Continuing my search to understand NN's affiliates, I've found the following in ACC's 1997 annual report.
Blair Geddes, Director of Finance, writes:
Fiscal 1997 was a year of significant accomplishment for ACC. The Company reported record revenues of $40.8 million, an increase of 36% over the $30.1 million reported in fiscal 1996. For the first time since its inception in 1991 and only one year after a significant restructuring, ACC reported its first ever annual profit of $40.4 thousand compared to a loss of $1.0 million in fiscal 1996 (excluding restructuring charges).
The growth in revenues came primarily from product sales which increased 49% over those of fiscal 1996. Of this, new product introductions, led by our Congo small office/home office ISDN solution, accounted for half of the increase with the balance coming primarily from our Amazon central office router, our best selling product.
In the fourth quarter, ACC commenced shipment of the seven slot version of our Tigris Integrated Access Platform, quite possibly the most exciting product ACC has ever developed. The Tigris positions itself at the high-end of our product range and launches ACC into the Remote Access Concentrator Market. Dataquest projects that this market will grow from $1 billion in 1996 to over $5 billion in the year 2000. As well, this is the Company's first chassis based product and the seven slot version allows our customers to populate the chassis with up to seven intelligent communication processor cards. Average selling prices will vary based on a customer's preferred configuration but will range from five to thirty times larger than the average selling price of our next nearest priced product.
The gross margin for the year was 51.6% compared with 50.9% in 1996. A favorable shift in product mix toward our higher margin products, as well as substantial cost reductions on these products, enabled the Company to show an improvement in the margin despite intense competitive pressures at the low-end of our product range, particularly with the Congo. The introduction of the Tigris at the high-end of our product range should help the Company's margins in the future.
The Company invested $6.7 million in research and development activities during the year. Tigris was the most significant initiative ever undertaken by the Company from a development perspective and comprised 44% of our spend in 1997. Efforts were focused on the development of the seven-slot Tigris and the intellectual property that forms the basis for ongoing development of the three- and eleven-slot versions that the Company plans on releasing in fiscal 1998. The Company has now invested $38.2 million in research and development since 1991.
ACC remains of strategic importance to Newbridge Networks, our majority shareholder, and this was demonstrated during the year in a number of ways. Revenues from Newbridge were $13.3 million in 1997, an increase of 86% from 1996. ACC also purchased $6.3 million in product from Newbridge during the year, an increase of 16% over 1996. ACC and Newbridge entered into a number of joint marketing and development initiatives during the year, most notably with Tigris. Newbridge also exercised an option acquired in 1993 to purchase 500,000 common shares of the Company during fiscal 1997 and subsequent to year-end, Newbridge purchased common shares from another shareholder to hold 60.7% of the outstanding common and equivalent shares of the Company.
Note 11 in annual report:
Newbridge owns 2,083,339 common shares, 742,859 Series A preferred shares, 982,000 Series B preferred shares and 5,394,737 Series C preferred shares at March 31, 1997, which comprised 56.3% of the voting control of the Company at March 31. 1997. Subsequent to March 31, 1997, Newbridge acquired 877,220 common shares from an existing shareholder to hold 60.7% of the voting control of the Company.
Chairman of the Board is Ossama Hassanein, President, Newbridge Networks Holdings.
Other board members include: James Avis, Executive VP, Business Development and General Counsel, Newbridge Networks Corp.; Peter D. Charbonneau, (former) President and COO, Newbridge Networks Corp.; and Scott Marshall, Executive VP, Research and Development, Newbridge Networks Corp.
Links:
acc.com
acc.com [check out moving font for logo: "Watermark."]
acc.com
acc.com [white papers]
acc.com
acc.com
Dataquest stats for Remote Access market:
1995:
Access Concentrators 20%
Access Servers 24%
Access Routers 56%
2000
Access Concentrators 43%
Access Servers 17%
Access Routers 40%
According to IDC numbers, total Revenue for Access market will increase from 2,680 in 1995 to 12,171 in 2000. In the same time frame, Remote Access Concentrators will grow from 536 to 5,280; Remote Access Servers from 657 to 2,018; and Remote Access Routers from 1,485 to 4,877. [$M]
ACC is targetting the carrier class Remote Access Concentrator market.
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