Sonus Networks Reports 2000 Third Quarter Financial Results
Q3 Revenues Grow to $15.6 Million, Increase 139% Over Preceding Quarter
WESTFORD, Mass., Oct 11, 2000 (BUSINESS WIRE) -- Sonus Networks, Inc. (Nasdaq: SONS chart, msgs), a leading provider of voice infrastructure solutions for the new public network, today reported financial results for its third quarter ended September 30, 2000.
Revenues for the third quarter of fiscal 2000 were $15.6 million compared with $6.5 million for the second quarter ended June 30, 2000, an increase of 139 percent. Net loss, excluding stock-based compensation, for the third quarter of fiscal 2000 was $5.4 million or $0.04 per share, compared with a net loss, excluding stock-based compensation, of $9.0 million or $0.07 per share on a pro forma basis for the second quarter of fiscal 2000.
Net loss for the third quarter of fiscal 2000, including stock-based compensation, was $12.4 million or $0.09 per share, compared with a net loss of $15.4 million or $0.12 per share on a pro forma basis, for the second quarter of fiscal 2000.
Revenues for the first nine months of fiscal year 2000 were $23.2 million. Net loss, excluding stock-based compensation, for the first nine months of fiscal year 2000 was $23.4 million or $0.18 per share, on a pro forma basis. Net loss for the first nine months of fiscal year 2000 was $43.8 million or $0.34 per share on a pro forma basis.
Certain per share amounts above are on a pro forma basis, which assumes the conversion of all redeemable convertible preferred stock into common stock as if such conversion occurred at the date of original issuance. The net income per share and number of shares used in the per-share calculation for all periods presented reflect the three-for-one stock split that was effective October 10, 2000.
"We are extremely pleased with the progress we have made in the third quarter, our first full quarter as a public company," said Hassan Ahmed, Sonus' president and CEO. "We achieved significant growth in our revenues during the quarter and continued to build on our early market leadership through major contracts with new customers, the development of new product capabilities and formation of key industry partnerships. It is clear that the migration to the new public network represents one of the industry's most fundamental market transitions and we look forward to capitalizing on the opportunity before us."
In the third quarter, Sonus announced that two new customers, Time Warner Telecom and PointOne Telecommunications, have selected Sonus' solutions to build out their next-generation voice infrastructures. Time Warner Telecom is deploying Sonus' complete Packet Telephony suite first for Internet offload and in the future, to deliver both long distance and local voice services. PointOne is rolling out the Sonus equipment throughout its network to enable the scalability of its existing IP-voice infrastructure and to offer a range of voice and data services.
During the quarter, Sonus continued to broaden its product portfolio. In August, Sonus announced it has joined with NTT Communicationware and Nissho Electronics to develop, market and support a Japanese version of the award-winning Sonus Packet Telephony suite. In September, the company debuted Sonus Insight(TM), a comprehensive, web-based element management system (EMS) designed to simplify the deployment and operation of carrier-class packet voice networks and provide seamless OSS (operations support systems) integration.
Also in the third quarter, Sonus expanded its partnerships with telecom industry leaders. Continuing to execute on its access strategy, Sonus forged a relationship with Copper Mountain Networks, a leading provider of DSL solutions for business and residential users, to provide carriers an end-to-end packet voice solution. As part of the relationship, the two companies announced the interoperability of Sonus' GSX9000(TM) Open Services Switch and PSX6000(TM) SoftSwitch with Copper Mountain's CopperEdge concentrators and CopperRocket Integrated Access Devices (IADs). Sonus continued to build its Open Services Partner Alliance(TM) (OSPA) with the addition of eight new partners during the quarter, and membership in the OSPA now stands at 42 telecom companies.
About Sonus Networks
Sonus Networks, Inc. is a leading provider of voice infrastructure products for the new public network. Sonus' solutions enable service providers to deploy an integrated network capable of carrying both voice and data traffic, and to deliver a range of innovative, new services. The Sonus Open Services Architecture(TM) (OSA) and award-winning Packet Telephony suite cut the time-to-market for competitive new service products, allowing carriers and third-party developers to expand marketshare and build important new revenue streams. Its highly scalable products fully interoperate with and extend the life and utility of today's public network. Sonus embodies in its management and staff decades of experience in developing carrier-class voice, data and multimedia solutions for implementation in the world's largest networks. Sonus, founded in 1997, is headquartered in Westford, Massachusetts. Additional information on Sonus is available at sonusnet.com.
This release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sonus that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to Sonus' Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, filed with the SEC, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. These risk factors include, among others, the Company's ability to grow its customer base, dependence on new product offerings, market acceptance of its products, rapid technological and market change and manufacturing and sourcing risks.
Sonus Insight, GSX9000, PSX6000, Open Services Partner Alliance and Open Services Architecture are trademarks of Sonus Networks. All other company and product names may be trademarks of the respective companies with which they are associated.
SONUS NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
September 30, December 31,
2000 1999
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $152,685 $8,885
Marketable securities -- 14,681
Accounts receivable, net 7,617 --
Inventories 14,388 2,210
Other current assets 1,879 298
Total current assets 176,569 26,074
Property and equipment, net 10,703 4,269
Other assets, net 911 439
$188,183 $30,782
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Current portion of long-term obligations $0 $1,336
Accounts payable 11,800 1,412
Accrued expenses 13,763 2,691
Deferred revenues 12,264 1,031
Total current liabilities 37,827 6,470
Long-term obligations, less current portion -- 3,402
Redeemable convertible preferred stock -- 46,109
Stockholders' Equity (Deficit):
Common stock 61 22
Capital in excess of par value 268,288 25,611
Accumulated deficit (77,688) (33,882)
Stock subscriptions receivable (346) (346)
Deferred compensation (39,894) (16,604)
Treasury stock, at cost (65) --
Total stockholders' equity (deficit) 150,356 (25,199)
$188,183 $30,782
SONUS NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues $15,568 $0 $23,171 $0
Manufacturing and
product costs 8,830 519 14,846 1,091
Gross Profit (Loss) 6,738 (519) 8,325 (1,091)
Operating Expenses:
Research and development 7,032 2,434 18,231 7,505
Sales and marketing 5,833 1,475 13,576 2,747
General and administrative 1,763 438 3,750 1,114
Stock-based
compensation 6,982 1,090 20,347 2,171
Total operating
expenses 21,610 5,437 55,904 13,537
Loss from Operations (14,872) (5,956) (47,579) (14,628)
Interest income, net 2,495 71 3,813 283
Net Loss ($12,377) ($5,885) ($43,766) ($14,345)
Net Loss Per Share:
Basic and Diluted ($0.09) ($0.38) ($0.57) ($1.13)
Shares Used
in Computation 144,836 15,631 77,448 12,729
Pro Forma Net
Loss Per Share (1):
Basic and Diluted ($0.09) ($0.06) ($0.34) ($0.16)
Basic and Diluted, ($0.04) ($0.05) ($0.18) ($0.13)
Excluding Stock-based
Compensation
Shares Used in Computation 144,836 96,330 130,291 91,351
(1) Pro forma basic and diluted net loss per share have been calculated assuming the conversion of all outstanding preferred stock into common stock, as if the conversion had occurred at the date of issuance.
NOTE: Shares used in the net loss per share and the pro forma net loss per share calculations retroactively reflect the three-for-one stock split effective on October 10, 2000.
Contact:
Sonus Networks Sonus Networks
Beth Morrissey Stephen J. Nill
978-589-8579 978-392-8277
bmorrissey@sonusnet.com snill@sonusnet.com
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