7/18...TERN Posts Quarterly Revenues of $92.0 Million with
Pro Forma Profit of $0.07 per Share
SANTA CLARA, Calif.--(BUSINESS WIRE)--July 18, 2000--Terayon Communication Systems, Inc. (Nasdaq: TERN - news), a leading supplier of broadband networking systems, today reported record pro forma profit for the quarter ended June 30, 2000, with pro forma net income of $0.07 per share diluted, versus a pro forma net loss of $0.08 per share basic for the same period last year.
Revenues for the second quarter of 2000 grew 382% to $92.0 million from $19.1 million in the second quarter of 1999. Pro forma net income of $0.07 per share diluted, or $4.7 million, represents an increase from $0.03 per share diluted, or $1.9 million, in the first quarter of 2000. Revenues for the six months ended June 30, 2000 increased to $151.4 million from $35.0 million for the same period last year. Pro forma net income for the six months ended June 30, 2000 increased to $0.10 per share diluted, or $6.6 million, compared to a pro forma net loss per share of $0.20 basic, or $7.7 million, for the six months ended June 30, 1999.
The pro forma results exclude non-cash charges for in-process research and development, the amortization of intangible assets related to acquisitions, and the cost of certain warrants to purchase common stock. Including charges related to in-process research and development, the amortization of intangible assets, and the cost of the warrants, the net loss for the second quarter of 2000 was $0.57 per share, or $34.4 million, compared to a net loss of $0.36 per share, or $14.6 million for the same period last year. The net loss of the six months ended June 30, 2000 was $1.09 per share, or $62.8 million, compared to a net loss of $0.53 per share, or $20.5 million, for the six months ended June 30, 1999.
Terayon CEO Zaki Rakib stated, ``Revenue growth continued to be strong, as we completed another record quarter, with growth of more than 55 percent over the prior quarter.
``In the quarter, we shipped record numbers of cable data systems to our major customers, further expanding our broadband data footprint. Terayon continues to build a strong customer base, adding U.S. cable operator Adelphia as a customer for our cable data systems, and Casema in Europe for our broadband voice systems. We enter the third quarter with strong customer demand and a solid base for the accelerating broadband revolution ahead.''
Rakib concluded, ``We continued to make significant progress with our broadband growth strategy by successfully closing four key acquisitions in the quarter. These acquisitions provide Terayon with critical technologies, intellectual assets and products, providing a more complete broadband portfolio. This allows us to bring to market broadband systems that span cable, DSL and wireless, and support a rich mix of voice, data and video-based services.''
About Terayon
Terayon Communication Systems provides innovative broadband access systems for delivering advanced voice, data and video services over cable, DSL and satellite networks. The company's broadband systems are deployed by the world's leading cable and telecommunications carriers. Terayon, headquartered in Santa Clara, Calif., has sales and support offices worldwide, and is traded on the Nasdaq under the symbol TERN. Terayon can be found on the web at www.terayon.com.
``Safe Harbor'' Statements under the Private Securities Litigation Reform Act of 1995:
Except for the historical information contained herein, this news release contains forward-looking statements, estimates, and assumptions by the Company and other parties that involve risks and uncertainties, including the Company's ability to successfully integrate any acquired companies, the Company's ability to gain new business and develop and offer new products, the expansion of operations by the Company's customers and the deployment of the Company's products in specific markets, as well as the other risks detailed from time to time in the Company's filings with the SEC.
Note to Editors: Terayon, the Terayon logo, TeraPro, TeraLink, and TeraComm are registered trademarks of Terayon Communication Systems, Inc. TeraView and CherryPicker are trademarks of Terayon Communication Systems, Inc. All other trademarks are property of their respective owners.
Terayon Communication Systems, Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues $ 92,019 $ 19,082 $ 151,356 $ 34,955
Cost of goods sold 58,010 15,274 95,629 29,229
--------- --------- --------- ---------
Gross profit 34,009 3,808 55,727 5,726
--------- --------- --------- ---------
Operating expenses:
Research and
development 15,337 3,951 25,345 7,106
Sales and marketing 10,031 3,016 17,229 5,852
General and
administrative 5,508 1,549 9,527 2,712
--------- --------- --------- ---------
Total operating
expenses 30,876 8,516 52,101 15,670
--------- --------- --------- ---------
Pro forma income
(loss) from
operations 3,133 (4,708) 3,626 (9,944)
Other income, net 1,540 1,239 2,934 2,197
--------- --------- --------- ---------
Pro forma net
income (loss) $ 4,673 ($3,469) $ 6,560 ($7,747)
========= ========= ========= =========
Pro forma net income
(loss) per share,
2000 diluted, 1999
basic $ 0.07 ($0.08) $ 0.10 ($0.20)
========= ========= ========= =========
Shares used in pro
forma per share
calculation, 2000
diluted, 1999 basic 69,112 40,984 67,183 38,850
========= ========= ========= =========
Terayon Communication Systems, Inc.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues $ 92,019 $ 19,082 $ 151,356 $ 34,955
Cost of goods sold 66,500 15,274 110,448 29,229
--------- --------- --------- ---------
Gross profit 25,519 3,808 40,908 5,726
--------- --------- --------- ---------
Operating expenses:
Research and
development 16,566 3,951 27,134 7,106
Cost of product
development
assistance agreement -- 11,178 9,563 12,793
Sales and marketing 10,796 3,016 18,472 5,852
General and
administrative 5,761 1,549 9,946 2,712
In-process research
and development 13,085 -- 19,835 --
Amortization of
goodwill 15,215 -- 21,650 --
--------- --------- --------- ---------
Total operating
expenses 61,423 19,694 106,600 28,463
--------- --------- --------- ---------
Loss from operations (35,904) (15,886) (65,692) (22,737)
Net interest income 1,540 1,239 2,934 2,197
--------- --------- --------- ---------
Net loss (34,364) (14,647) (62,758) (20,540)
========= ========= ========= =========
Historical net
loss per share,
basic and diluted ($0.57) ($0.36) ($1.09) ($0.53)
========= ========= ========= =========
Shares used in
historical per
share calculation,
basic and diluted 60,692 40,984 57,696 38,850
========= ========= ========= =========
Terayon Communication Systems, Inc.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $ 59,018 $ 32,398
Short-term investments 62,329 80,594
Accounts receivable, net 56,277 21,296
Inventories 19,272 4,991
Prepaid expenses and other 23,534 4,161
-------- --------
Total current assets 220,430 143,440
Property and equipment, net 18,594 6,157
Intangibles and other assets 507,283 151,639
-------- --------
Total assets $746,307 $301,236
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 61,078 $ 13,217
Accrued payroll and other liabilities 29,278 17,849
-------- --------
Total current liabilities 90,356 31,066
Non-current liabilities 25,940 11,515
Stockholders' equity 630,011 258,655
-------- --------
Total liabilities and stockholders' equity $746,307 $301,236
======== ========
--------------------------------------------------------------------------------
Contact:
Terayon
Ray Fritz, 408/727-4400 (CFO)
rfritz@terayon.com
John Hamburger, 408/486-5273 (IR)
johnh@terayon.com
John Giddings, 408/486-5223 (PR)
jgiddings@terayon.com
or
Financial Relations Board
Janet Campbell, 415/296-2267
jcampbel@frb.bsmg.com
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