Eicon Reports Fourth Quarter and Fiscal 2000 Results
MONTREAL, CANADA--AUGUST 18, 2000 - 09:00 EDT
Eicon Technology, a worldwide provider of
Internet access products, today announced its results for the
fourth quarter ended June 30, 2000. Sales for the fourth quarter
were $36.4 million, which represents a significant 24 % increase
over the sales of $29.3 million recorded in the previous quarter.
Sales in the fourth quarter of fiscal 1999 amounted to $50.1
million. In line with the Company's projections, its net loss for
the fourth quarter was $6.9 million or $0.20 per share as compared
to a net loss of $24.9 million or $0.73 per share for the previous
quarter. In the fourth quarter of fiscal 1999, the Company's net
income amounted to $3.3 million ($0.10 per share).
For the fiscal year ended June 30, 2000, sales of $163.5 million
were 7 % less than sales of $176.4 million in fiscal 1999. The
Company incurred a loss of $31.0 million ($0.91 per share) this
year, as compared with net income of $10.3 million ($0.30 per
share) in fiscal 1999. This loss includes a restructuring charge
of $6.0 million ($0.17 per share) as a result of the Company's
decision to reorganize its operations and reduce its
infrastructure. Net loss per share, excluding this restructuring
charge, was $0.74.
Management has taken decisive measures to realign the Company to
increase its focus on expanding markets to accelerate its growth,
namely Internet access and media gateways for Voice over IP (VoIP)
and unified messaging. The implementation of this new market
strategy, along with a disciplined cost reduction program, has
enabled the Company to considerably reduce its losses in the final
quarter of the year. Improved sales (up 24 %) and gross margins
(up 5 percentage points) along with reduced expenses had a
positive impact on the Company's results for its last quarter.
The Company's cost-reduction plan is delivering savings as
anticipated. In the fourth quarter, the Company achieved savings
of 17 % in selling, general and administrative expenses. It also
reduced its Research and Development expenditures by 21 %, mainly
as a result of a planned reduction of its R&D staff. These cost
reductions are part of a plan to reduce spending to industry
norms.
The Company has realized a number of business achievements in the
fourth quarter.
- The Company introduced its ADSL modems to the market and several
units of its DIVA 2430 ADSL Modem have been delivered to key
industry players for testing. The Company expects that these
products, which use the latest generation of ADSL chipsets, will
be successful in both the American and European markets. The
Company's Internet access solutions have been proven to reduce
many of the installation and configuration problems that Telcos
are facing while offering consumers and businesses an easy way to
take advantage of the speed of ADSL. Interoperability of these
products has been successfully demonstrated with equipment from
the leading DSLAM (Digital Subscriber Line Access Multiplexer)
vendors ensuring easy deployment regardless of the field equipment
being used by the local telephone company.
- The Company has reinforced its leadership position as a provider
of ISDN solutions throughout Europe with the conclusion of an
agreement with Deutsche Telekom, Europe's leading
telecommunications service provider. The latter is currently
reselling Eicon's DIVA ISDN USB solutions to its customers in
Germany, the largest ISDN market in the world.
- Globally, sales of Eicon's award winning DIVA ISDN products are
continuously growing with a 78 % increase in the number of units
shipped as compared to the previous quarter. The Company has
developed a reputation for providing reliable, high-performance
ISDN connectivity solutions for remote access to corporate
networks and the Internet. The Company will continue to add new
ISDN solutions to the DIVA family of products.
- The Company announced its decision to create a new division
called Aviva Solutions to market and distribute the Company's host
access solutions. The host access environment involves unique
requirements in terms of sales and marketing, so Aviva will
operate independently with its own dedicated sales force, R&D,
Marketing and Customer Support organization. This new structure
will enable it to become a leader in the high growth, high margin
Web-to-Host market. Aviva is presently seeking venture capital to
accelerate its growth.
"Fiscal year 2000 ends on an optimistic note, despite difficulties
encountered during the third quarter, which are reflected in our
year-end results. The Company's target markets were refined in
the fourth quarter to enhance the Company's positioning in key
markets where growth opportunities have been identified," said
Peter Brojde, President and CEO of Eicon Technology. "Eicon is
positioned in the right markets and our Research & Development
team is tightly aligned with the particular needs of these
markets. Thanks to the support of our workforce, Eicon's leaner
infrastructure is ready to deliver stronger sales and return the
Company to sustainable growth. We anticipate a return to
profitability by end of the second quarter of fiscal 2001."
A conference call discussing Eicon's financial results for the
fourth quarter and year-end will be held on August 18, 2000 at
11:00 AM Montreal time. All those interested may access a live
web cast of the conference call through the Investors Relations
section of Eicon's web site, eicon.com or by going
directly to Vcall at vcall.com.
Eicon Technology Corporation
Eicon Technology Corporation is a worldwide provider of Internet
access products. The Company develops, markets and supports
hardware and software products for connecting PCs and network
servers to the Internet and corporate networks and supplies media
gateways for voice over IP and unified messaging. Eicon's
products are sold in more than 80 countries through a network of
channel partners, telecommunications companies and Original
Equipment Manufacturers. Eicon's shares are traded on the Toronto
Stock Exchange under the symbol "EIC." Information about Eicon
and its products is available at eicon.com |
