Friday??????? They reported this morning!!!
Efficient Networks, Inc. Reports Record Revenues For Second Quarter Fiscal 2000
Revenue Surges 117% As Company Capitalizes on Accelerating Demand For DSL Customer Premises Equipment
January 18, 2000 05:00 AM
DALLAS, Jan. 18 /PRNewswire/ -- Efficient Networks, Inc. EFNT , a worldwide developer and supplier of high-speed digital subscriber line (DSL) customer premises equipment (CPE) for the broadband access market, today reported record revenues of $26.4 million for the quarter ended December 31, 1999.
Revenues for the quarter were $26.4 million, an increase of 117% over revenues of $12.2 million for the quarter ended September 30, 1999. Revenues for the quarter ended December 31, 1998 were $1.9 million.
During the quarter, the company completed the acquisition of FlowPoint Corporation from Cabletron Systems, Inc. FlowPoint Corporation, based in Santa Clara, California, was purchased for a combination of common stock and convertible preferred stock equal to an aggregate of 13.5 million shares of Efficient's common stock on an as-converted basis. The acquisition of FlowPoint closed December 17, 1999. FlowPoint contributed $3.0 million in revenue during the December quarter. Without the addition of the FlowPoint revenue, Efficient's revenues would have been $23.4 million, an increase of 93% over the level achieved in the prior quarter.
Operating loss for the quarter ended December 31, 1999, excluding acquisition related charges and amortization of deferred stock option compensation, was $5.2 million, or $.14 per share. This compares to $6.3 million or $.21 per share before amortization of deferred stock option compensation for the quarter ended September 30, 1999.
The net loss for the December quarter was $18.1 million, or $0.47 per share. Net loss included stock option compensation expense of $1.2 million, a one-time write-off of $5.0 million of in-process research and development incurred in connection with the FlowPoint acquisition. In addition, in connection with the acquisition of FlowPoint, the company recorded $924.5 million of intangible assets, of which $7.4 million was amortized in the December quarter and the remainder will be amortized at the rate of approximately $46.2 million per quarter over a five-year period. This compared with a net loss of $7.8 million (including stock option compensation expense of $1.4 million), or $.25 per share for the quarter ended September 30, 1999, and a loss of $3.7 million (including stock option compensation expense of $0.5 million), for the corresponding period one year ago.
For the first half of fiscal year 2000, revenues were $38.6 million, a 1,176% increase over $3.0 million for the first half of fiscal year 1999. The net loss for the first half of fiscal 2000 was $25.9 million, or $0.75 per share, compared to a loss of $7.1 million, or $1.94 per share, for the first half of last year.
Gross margins improved significantly in the December 1999 quarter, reaching the company's target of 20% of net sales, compared to 12.0% achieved in the quarter ended September 30, 1999, excluding one-time costs associated with the change in the company's contract manufacturer, or 4% including the one-time costs incurred in that quarter. The increase in gross margins on a sequential quarterly basis resulted primarily from a change to ACT, the company's new contract manufacturer, cost efficiencies associated with higher volumes and a favorable change in the mix of products sold during the December quarter.
Operating expenses, excluding acquisition related charges and amortization of deferred stock option compensation, were $10.5 million or 40% of net revenues for the quarter ended December 31, 1999, compared to $6.8 million or 55% of net revenues for the quarter ended September 30, 1999. The increase in operating expenses in absolute amount resulted primarily from a substantial increase in personnel in the company's sales and marketing and research and development organizations. Overall head count increased 80% from 163 at September 30, 1999 to 293 at December 31, 1999, including FlowPoint. Total operating expenses for the quarter ended December 31, 1999 were $24.0 million compared to $8.1 million for the quarter ended September 30, 1999 and to $4.0 million for corresponding period one year ago.
Reviewing the quarter, Efficient Networks President and CEO Mark Floyd said, "We had an outstanding second quarter. We executed our plan on three fronts: a substantial increase in revenue, significant improvement in gross margins and a decrease in operating expenses as a percentage of revenue, excluding acquisition related charges. Demand for DSL has really taken off, and our business in the second quarter reflected that growth," Floyd said.
Each of the company's top three customers accounted for at least 10% of the net revenue for the quarter ending December 30, 1999: ACSI, which fulfills orders for Southwestern Bell; Covad Communications; and Innotrac Corporation, which fulfills orders for BellSouth and MindSpring. The company's top 10 customers represented 80% of total revenue for the December quarter, compared to 95% in the quarter ended September 30, 1999.
For the quarter ended December 31, 1999, sales to customers outside of the United States represented 23% of net revenues, compared to 19% for the quarter ended September 30, 1999. The company expects that a substantial portion of its revenues will continue to be derived from customers outside the United States.
Note: The Efficient Networks conference call will be broadcast live over the Internet on Tuesday, January 18, 2000 at 7:30 a.m. CST. Log on to www.efficient.com. Click on "About Efficient," then click on "Investor Relations." Minimum requirements to listen include the RealPlayer software, downloadable free from www.real.com/products/player/index.html .
About Efficient Networks
Efficient Networks, Inc. is a recognized leader in broadband access products that employ digital subscriber line (DSL) technology. Emphasizing ease of use, the company's SpeedStream(TM) family of DSL products provides high performance remote access for small and medium businesses, branch offices, telecommuters and consumers. Working in partnership with DSL service providers worldwide, Efficient is enabling a new generation of broadband applications today. Efficient Networks is based in Dallas, Texas, with sales and support locations around the world. For more information, visit our web site at www.efficient.com or contact us at 972-991-3884.
This press release may contain forward-looking statements that are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Readers are referred to the reports and documents filed with the Securities and Exchange Commission, especially the Company's Registration Statement filed on January 7, 2000 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999 for a discussion of factors that may cause actual results to differ.
EFFICIENT NETWORKS, INC.
Consolidated Balance Sheets
(In thousands, except share data)
Assets December 31, 1999 June 30, 1999
(unaudited)
Current assets:
Cash and cash equivalents $31,803 $3,604
Short-term investments 3,983 --
Accounts receivable, net of allowance
for doubtful accounts of $658 and $120
at December 31, 1999 and June 30, 1999,
respectively 37,219 10,316
Inventories 26,424 5,472
Other assets 1,344 241
Total current assets 100,773 19,633
Furniture and equipment, net 5,066 2,285
Other assets, net 231 29
Intangible assets, net of accumulated
amortization of $7,358 and $0 at
December 31, 1999 and June 30, 1999,
respectively 917,171 --
$1,023,241 $ 21,947
Liabilities, Redeemable Convertible
Preferred Stock and Stockholders'
Equity (Deficit)
Current liabilities:
Accounts payable $8,908 $4,104
Accrued liabilities 30,558 2,208
Deferred revenue 3,399 736
Total current liabilities 42,865 7,048
Long-term debt, net of discount -- 13,396
Other liabilities 19 22
Total liabilities 42,884 20,466
Redeemable convertible preferred stock 431,550 40,495
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, par value $.001 per
share, 100,000,000 shares authorized;
44,834,917 and 4,362,221 shares issued
and outstanding at December 31, 1999
and June 30, 1999, respectively 45 4
Additional paid-in capital 641,369 29,777
Deferred stock option compensation (12,537) (14,606)
Accumulated deficit (80,070) (54,189)
Total stockholders' equity (deficit) 548,807 (39,014)
$1,023,241 $21,947
EFFICIENT NETWORKS, INC.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
1999 1998 1999 1998
Net revenues $26,424 $1,850 $38,595 $3,024
Cost of revenues 21,219 1,647 32,925 2,510
Gross profit 5,205 203 5,670 514
Operating expenses:
Sales and marketing 4,849 1,303 7,502 2,471
Research and
development 4,318 1,790 7,371 3,616
General and
administrative 1,284 411 2,330 750
Stock option
compensation 1,219 475 2,608 908
Amortization of
intangibles 7,358 -- 7,358 --
In process research
and development
charge 4,970 -- 4,970 --
Total operating
expenses 23,998 3,979 32,139 7,745
Loss from
operations (18,793) (3,776) (26,469) (7,231)
Interest income 666 31 1,263 118
Interest expense
and other, net -- (1) (675) (8)
Net loss $(18,127) $ (3,746) $(25,881) $ (7,121)
Basic and diluted
net loss per share
of common stock $ (.47) $ (1.00) $ (.75) $ (1.94)
Weighted-average
shares of common
stock outstanding 38,644 3,819 34,570 3,766
SOURCE Efficient Networks, Inc.
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