5/25...Ditech Communications Announces Record Q4 Revenues and Year-End Earnings
Fiscal 2000 Revenues Increase 360% Over 1999
MOUNTAIN VIEW, Calif., May 25 /PRNewswire/ -- Ditech Communications Corporation (Nasdaq: DITC - news) today reported its fourth quarter and annual results for its fiscal year ended April 30, 2000. Ditech Communications closed its fiscal year with revenue of $116.9 million, an increase of 360% over revenues of $25.4 million from the previous year.
Revenues for the fourth quarter ended April 30, 2000 were $46.8 million, up 537% over revenues of $7.3 million in the same quarter last year. This quarter's results were a record for the company and mark the 10th consecutive quarter of revenue growth.
Pro forma results, which exclude non-cash charges associated with acquisitions, which includes amortization of goodwill, deferred stock compensation and purchased research and development, were:
-- Net income for the fourth quarter was $16.2 million, up from
$318,000 in the same quarter last year.(1)(2)
-- Earnings per share for the fourth quarter was $0.54 compared to
($0.01) for the same quarter last year (3)
-- Net income for fiscal 2000 was $37.3 million, up from $575,000 for
fiscal 1999.(1)(2)
-- Earnings per share for fiscal 2000 was $1.38, up from $(0.13) in fiscal
1999. (3)
Actual results were:
-- Net income for the fourth quarter of fiscal 2000 was $8.9 million
compared to $318,000 in the same quarter last year.(2)(3)
-- Earnings per share for the fourth quarter were $0.30 per share compared
to ($0.01) for the same quarter last year (3)
-- Net income for fiscal 2000 was $30.0 million, up from $575,000 for
fiscal 1999.(2)
-- Earnings per share for fiscal 2000 was $1.11, up from $(0.13) in fiscal
1999.(3)
``This quarter capped a tremendous first year as a public company,'' said Tim Montgomery, Ditech's President and CEO. ``On the voice side of our business, Ditech's products continue to enjoy decided competitive advantages in density, flexibility, and overall lower cost of ownership. As a result, we generated $42 million in voice revenues alone in Q4 2000, more than we had originally estimated for total company revenues in fiscal 2000. In our optical business for the quarter, we continued to ramp revenues through implementation of our subsystem strategy. By providing plug-and-play optical subsystems, Ditech enables system companies to both lower the cost and speed the deployment of optical networks.''
Continued Montgomery, ``Looking at the year, with revenues for the year of $117 million, we more than quadrupled our revenues of $25 million from the previous year. Almost as important, our growth was balanced. We saw a four-fold increase in both voice and optical revenues. Another major achievement this year was the 60 percent growth in our customer base, which went from 56 customers in fiscal 1999 to over 89 in fiscal 2000. Additionally, we significantly strengthened our balance sheet, which enhances our ability to invest and grow the company. Finally, while we grew the company at this fast pace, we also increased our gross margins and profitability. To all of the great people at Ditech, our customers and suppliers, I'd like to say congratulations and thanks for an extraordinary year.''
Ditech Communications Corporation
Ditech Communications Corporation is a global telecommunications equipment supplier for voice and data networks. Ditech's voice products are high-capacity echo cancellers that utilize advanced software and digital signal processor (DSP) technology. This unique combination of software and hardware allows Ditech to deliver Voice Quality of Service (VQoS(TM)), a robust and cost-effective solution for voice enhancement and echo cancellation. Ditech's products for data networks provide building blocks for high-speed, high-capacity backbone networks. These products are based on wavelength division multiplexing (WDM), a technology that enables many wavelengths of light, each carrying multiple gigabits of information, to be carried on one fiber optic connection. With Ditech's WDM products, network equipment companies and service providers can quickly and cost-effectively expand their network capacity to meet the growing demands of the Internet age without incurring the vast time and expense of laying new fiber optic cable. Ditech (DITC) is listed on the Nasdaq National Market and is headquartered in Mountain View, California (Web site: ditechcom.com ).
Forward-Looking Statements
This press release contains forward-looking statements regarding Ditech's expected financial, marketing, and competitive performance. Actual results could differ materially as a result of unanticipated factors and events, including the risk that competitors may develop superior or more cost-effective technology, the risk that a small number of customers represent a large percentage of Ditech revenues for fiscal 2000, and those detailed in Ditech's prospectus dated October 5, 1999 filed with the Securities and Exchange Commission.
Footnotes
1 Ditech's pro forma financial results for this quarter do not include the
impact of non-cash charges related to M&A activity, including purchased
research and development, goodwill and other costs associated with the
Telinnovation acquisition (which closed on February 1, 2000), which was
accounted for as a purchase.
2 Net income excludes the impact of the accretion of dividends of
preferred stock which was redeemed in the first quarter of fiscal 2000.
3 EPS is computed after accretion of dividends on preferred stock
outstanding in fiscal 1999 and the first quarter of fiscal 2000. All
references to earnings per share set forth in this press release are
diluted earnings per share (EPS). Diluted earnings per share is based
on weighted average shares after giving effect for the two-for-one stock
dividend (split) which became effective on February 16, 2000.
Ditech Communications Corporation
Statements of Operations
For the Three and Twelve Month Periods Ending April 30, 2000 and 1999
(in thousands)
Three Months Ending Twelve Months Ending
April 30, April 30, April 30, April 30,
2000 1999 2000 1999
(Unaudited)
Revenue $46,766 $7,339 $116,946 $25,364
Cost of Goods Sold 13,296 3,266 34,913 11,858
Gross Margin 33,470 4,073 82,033 13,506
Operating Expenses
Sales and Marketing 3,116 1,655 9,411 5,759
Research and Development 2,427 1,009 6,647 3,860
General and Administrative 1,379 760 4,296 2,399
Purchased Research and
Development 8,684 -- 8,684 --
Amortization of Goodwill 1,860 -- 1,860 --
Amortization of
Stock Compensation 1,912 -- 1,912 --
Total Operating Expenses 19,378 3,424 32,810 12,018
Operating Income 14,092 649 49,223 1,488
Other Income/(Expense) 899 (101) 1,545 (500)
Income Before Income Tax
Expense 14,991 548 50,768 988
Provision for Income Taxes 6,113 230 20,765 413
Net Income 8,878 318 30,003 575
Accretion of Mandatorily
Redeemable Preferred Stock -- 382 99 1,497
Net Income (Loss)
Attributable to Common
Stockholders $8,878 ($64) $29,904 ($922)
Net Income (Loss) per Share
Basic $0.32 ($0.01) $1.27 ($0.13)
Diluted $0.30 ($0.01) $1.11 ($0.13)
Weighted Shares Used in Per
Share Calculation
Basic 27,392 7,984 23,505 7,132
Diluted 29,987 7,984 27,016 7,132
Ditech Communications Corporation
Proforma Statements of Operations
For the Three and Twelve Month Periods Ending April 30, 2000 and 1999
(in thousands)
Three Months Ending Twelve Months Ending
April 30, April 30, April 30, April 30,
2000 1999 2000 1999
Revenue $46,766 $7,339 $116,946 $25,364
Cost of Goods Sold 13,296 3,266 34,913 11,858
Gross Margin 33,470 4,073 82,033 13,506
Operating Expenses
Sales and Marketing 3,116 1,655 9,411 5,759
Research and Development 2,427 1,009 6,647 3,860
General and Administrative 1,379 760 4,296 2,399
Total Operating Expenses 6,922 3,424 20,354 12,018
Operating Income 26,548 649 61,679 1,488
Other Income/(Expense) 899 (101) 1,545 (500)
Income Before Income Tax
Expense 27,447 548 63,224 988
Provision for Income Taxes 11,227 230 25,879 413
Proforma Net Income 16,220 318 37,345 575
Accretion of Mandatorily
Redeemable Preferred Stock -- 382 99 1,497
Proforma Net Income (Loss)
Attributable to Common
Stockholders $16,220 ($64) $37,246 ($922)
Proforma Net Income (Loss)
per Share
Basic $0.59 ($0.01) $1.58 ($0.13)
Diluted $0.54 ($0.01) $1.38 ($0.13)
Weighted Shares Used in
Per Share Calculation
Basic 27,392 7,984 23,505 7,132
Diluted 29,987 7,984 27,016 7,132
Note: The above proforma statements of operations exclude the impact of the noncash charges associated with Telinnovation, which was completed on February 1, 2000. The noncash charges excluded are ``Purchased Research and Development and Amortization of Goodwill and Stock Compensation.''
Ditech Communications Corporation
Condensed Balance Sheets
As of April 30, 2000 and 1999
(in thousands)
April 30,
2000 1999
Assets
Cash and Cash Equivalents $88,616 $3,114
Accounts Receivable, net 20,349 3,068
Inventory, net 6,596 4,606
Income Taxes Receivable 1,412 --
Prepaids and Other Current Assets 2,191 663
Total Current Assets 119,164 11,451
Property, Plant and Equipment, net 2,680 1,538
Purchased Technology and Goodwill 35,407 --
Deferred Income Tax Receivable, Long-Term 4,703 --
Other Assets 3,198 1,341
Total Assets $165,152 $14,330
Liabilities and Stockholders' Equity/(Deficit)
Accounts Payable $5,201 $2,559
Accrued Expenses 4,228 1,454
Income Taxes Payable -- 417
Other Current Liabilites 2,074 531
Current Portion of Long-Term Obligations 55 1,186
Total Current Liabilities 11,558 6,147
Long-Term Obligations 21 6,264
Deferred Income Tax Payable, Non-current -- 4
Total Liabilities 11,579 12,415
Redeemable Preferred Stock -- 25,258
Common Stock 171,147 3,090
Deferred Stock Compensation (21,937) (1,229)
Retained Earnings 4,363 (25,204)
Total Stockholders' Equity/(Deficit) 153,573 (23,343)
Total Liabilities and Stockholders'
Equity/(Deficit) $165,152 $14,330
SOURCE: Ditech Communications Corporation
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