***EARNINGS***
Glenayre Technologies Reports 3rd Quarter 2000 Earnings -- Glenayre
Reports 20 Cents Net Income -Surpassing Analyst Expectations for Fifth
Consecutive Quarter -- Glenayre Reports Highest Revenue Since 4Q98 -- Glenayre
Enters New Growth Era
CHARLOTTE, N.C., Oct 23, 2000 /PRNewswire via COMTEX/ -- Glenayre Technologies
Inc. (Nasdaq: GEMS) today announced its operating results for the third quarter
of 2000. For the quarter ended September 30, 2000, Glenayre reported earnings of
$0.20 per share. Excluding a one-time gain of $0.16 per share from a $10.9
million legal settlement, earnings would have been $0.04 per share compared with
($1.00) per share loss for the third quarter of 1999. Even adjusted for one time
events, results showed continued profitability exceeding First Call consensus
analyst estimates by $0.01, which marks the fifth consecutive quarter Glenayre
has surpassed analyst expectations. Excluding restructuring and one-time
charges, third quarter 2000 results are $0.09 cents per share better year over
year, and $0.02 cents per share better sequentially.
Income from operations improved to $2.6 million in the third quarter compared
with a ($68.9) million loss for the third quarter last year. Excluding
restructuring and one-time charges, third quarter income from operations of $2.6
million improved $11.2 million year over year and $1.7 million sequentially.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) was a
positive $7.6 million for the third quarter 2000 compared with a negative
($61.0) million for the third quarter 1999. Excluding restructuring and one-time
charges, EBITDA for third quarter 2000 of $7.6 million improved $8.3 million
year over year and $1.7 million sequentially.
Glenayre's net sales for the third quarter 2000 totaled $68.6 million, compared
with $61.3 million for the same quarter last year -- an increase of 12 percent.
This also represents a 21 percent increase in sales sequentially. Continued
record growth in Enhanced Services Platform (ESP) products as well as strong
demand for Glenayre's award-winning @ctiveLink(TM) wireless messaging module for
the Handspring Visor(TM) handheld computer led growth in revenue. ESP products
sales increased by 68 percent to $34.5 million in the third quarter compared
with $20.5 million reported in the third quarter 1999. Wireless Messaging
products sales increased sequentially by 23 percent to $34.1 million.
"I am pleased with the third quarter 2000 results," stated Bert Klein, Chief
Financial Officer of Glenayre. "Our performance in the quarter was solid and
exceeded our expectations. Our strategic growth model is producing solid
financial results with both ESP products and Wireless Messaging contributing
equally to revenue. In fact, our third quarter revenue of $68.6 million is the
highest since fourth quarter 1998 and exceeded consensus estimates by over 10
percent. Our balance sheet continues to strengthen with no debt and over $105.3
million in cash."
A milestone in the third quarter was the commercial launch of the @ctiveLink
two-way wireless messaging module. The @ctiveLink module won the Cellular
Telecommunications Industry Association's (CTIA's) consumer Appliance Award at
last week's Wireless IT 2000 show. This product launch demonstrates Glenayre is
expanding its core business from hardware and wireless messaging devices to
building active wireless solutions.
Eric Doggett, President and Chief Executive Officer of Glenayre stated, "We are
pleased with the new Glenayre's track record of producing sound and predictable
results. The strength of our business model is clear in the record revenue
levels generated this quarter. We are gaining tremendous momentum as we continue
to focus on delivering our 'Solutions for an @ctive World(TM)' product
portfolio. This is evidenced by the new strategic partnerships and the continued
robust demand for the @ctiveLink module and our other products."
In the third quarter, Glenayre continued to develop and invest in strategic
partnerships that complement its strategic growth model. The company is ahead of
its 2000 goal to sign application and solution developers and ASPs for the
@ctiveLink module. Strategic relationships include agreements with
AnyDevice.com, Inc., JP Systems, Inc., HandSignal, Inc., Veriprise Wireless
Corp., and Wysdom, Inc., to support the interoperability between each ASP's
platform and Glenayre's @ctiveLink module. Glenayre's strategic relationships
and positioning provides increased visibility as the company continues to gain
momentum.
Other key developments for the quarter included:
* Glenayre and Movil@ccess, Mexico's first Personal Interactive Communications
company and a subsidiary of Biper, S.A de C.V., announced the launch of Mexico's
first commercial two-way wireless messaging service. The new interactive
messaging system will use Glenayre's proven ReFlex-based technology to further
enhance the power and product offerings of Biper's existing all-Glenayre
communications network.
* Glenayre and Skytel Corp., a WorldCom company that provides interactive
two-way messaging and telemetry services throughout the U.S. and Latin America,
announced that the companies will provide wireless connectivity to handheld
computer users. Skytel will be the prime service provider for the @ctiveLink
modules sold through the PalmGear H.Q. Web site.
* The @ctiveLink module and AccessLink (TM) II device will be sold by
Amazon.com, Inc., a leading online retailer.
* Glenayre appointed Metrocall, Inc., one of the largest wireless data and
messaging companies in the U.S., as the service provider for Glenayre's wireless
messaging devices sold by Amazon.com. The companies also signed an agreement
that the @ctiveLink module bundled with the Handspring Visor(TM) will be
available to mobile users through Metrocall's extensive distribution channels.
* Glenayre announced the launch of Glenayre.net. This Web site offers
information on wireless technology and application solutions to developers,
Application Service Providers as well as service providers and their
subscribers. Developers will find the information and tools needed to build
applications for the @ctiveLink module.
* Glenayre announced the openUMS(TM) interface, an Application Programming
Interface (API), which allows third party solutions to interface directly with
Glenayre's ESP to allow quick-to-market delivery on Unified Messaging and
Internet Solutions.
"My first year has been spent building the new Glenayre, putting in place the
solid business foundation, the team, and focusing our R&D efforts on exciting
high-growth markets. I had set expectations that we would start demonstrating
the impact of these efforts by delivering top line growth starting in the second
half 2000, and we are indeed delivering," Doggett stated. "Glenayre's vision is
to lead the convergence of unified messaging, wireless, and the Internet to
deliver Solutions for an @ctive World. As part of our long-term growth strategy
I had stated that Glenayre would play a leadership role in providing wireless
connectivity for data-centric devices across network technologies, which we see
as key delivery vehicles for unified messaging applications. We plan on
leveraging our tremendous success and leadership role in ReFLEX and extending
the functionality of our platforms by including network assisted GPS location
capability next year. The announcement we have made this week with Qualcomm for
a modem card license that extends through w-CMDA also demonstrates our
commitment to a continued long-term growth acceleration path for the new
Glenayre."
A teleconference regarding Glenayre's third quarter earnings will be held
Tuesday, October 24, 2000, at 8:30 a.m. Eastern Time. To listen to the call,
please dial 719-457-2621. The conference call also will be simulcast on
www.glenayre.com. Audio replay of the call will be available for one week from
October 24, 2000, by calling 719-457-0820 and entering access code #708821.
About Glenayre:
For more than 35 years, Glenayre has developed and provided leading-edge
personal communication systems for the global market. We are focused on
delivering our Solutions for an @ctive World portfolio, leveraging core
competencies in the converging sectors of the wireless Internet and unified
messaging. Our wireless messaging products and systems include one- and two- way
wireless messaging infrastructure equipment; award-winning Always @ctive two-way
messaging devices; an array of Enhanced Services Platform products featuring
voice mail, fax messaging, voice-activated services, personal one- number
services; and debit/prepaid calling card platforms. Glenayre, headquartered in
Charlotte, North Carolina, has 1,300 employees located in 14 countries with 1999
net sales exceeding $238 million.
For more information on Glenayre, its products, and services, visit
www.glenayre.com.
Glenayre, the Glenayre logo, Solutions for an @ctive World, the Solutions for an
@ctive World logo, Always @ctive, AccessLink and @ctiveLink are trademarks of
Glenayre Electronics, Inc.
ReFLEX is a trademark of Motorola, Inc.
This news release contains statements that may be forward looking within the
meaning of applicable securities laws. The statements may include projections
regarding future earnings results, and are based upon the company's current
expectations and assumptions, which are subject to a number of risks and
uncertainties. Factors that could cause actual results to differ are discussed
in the company's most recently filed Form 10-Q. These factors may include:
potential decline in the paging infrastructure market; effective convergence of
technologies; potential market changes resulting from rapid technological
advances; growth of two-way interactive wireless messaging market; competition;
variability of quarterly results; volatility of the company's stock price;
limits on protection of proprietary technologies; potential changes in
government regulation; financing customer purchases for development of the
two-way communications market; international business risks; and the
continuation and expansion of strategic alliances and partnerships.
Glenayre Technologies 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
Net Sales $68,647 $61,274 $183,974 $176,062
Cost of Sales 31,934 36,504 82,344 103,545
Selling, General &
Administrative 17,437 21,595 52,049 61,035
Provision for doubtful
receivables 909 2,891 1,420 68,135
Research & Development 10,740 10,347 29,035 31,318
Depreciation &
Amortization 5,045 7,927 15,178 24,345
Write-off of goodwill
and other intangibles -- 50,919 -- 50,919
Unrealized loss on
subordinated notes -- -- -- 8,100
Adjustment to loss on
sale of business -- -- (524) --
Total Costs and
Expenses 66,065 130,183 179,502 347,397
INCOME (LOSS) FROM
OPERATIONS 2,582 (68,909) 4,472 (171,335)
Interest Income 1,684 885 4,694 4,446
Interest Expense (24) (14) (53) (280)
Gain (Loss) on disposal
of assets 75 (2,862) 378 (3,674)
Escrow Settlement 10,857 -- 10,857 --
Other, net (114) (381) (410) (28)
Total Other Income
(Expenses), net 12,478 (2,372) 15,466 464
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES 15,060 (71,281) 19,938 (170,871)
Provision (Benefit) for
Income Taxes 1,620 (9,283) 3,885 (45,222)
INCOME (LOSS) FROM
CONTINUING OPERATIONS 13,440 (61,998) 16,053 (125,649)
Income from Discontinued
Operations (Net of
Income Tax) -- 1,266 -- 1,979
NET INCOME (LOSS) $13,440 ($60,732) $16,053 ($123,670)
NET INCOME (LOSS) PER
COMMON SHARE - ASSUMING DILUTION:
Continuing Operations $0.20 ($1.00) $0.24 ($2.02)
Discontinued Operations -- 0.02 -- 0.03
$0.20 ($0.98) $0.24 ($1.99)
Number of Shares used to Compute
per Share Data 67,084 62,196 67,090 62,160
Glenayre Technologies Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
9/30/00 12/31/99
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $88,471 $73,513
Restricted cash 16,835 10,355
Accounts receivable, net 97,430 88,736
Notes receivable 1,919 7,083
Inventories 29,733 28,130
Deferred income taxes 18,803 16,668
Prepaid expenses and other current assets 5,142 4,249
Total current assets 258,333 228,734
Notes receivable, net 4,370 4,707
Property, plant and equipment, net 83,490 88,654
Goodwill 45,983 47,999
Deferred income taxes 35,646 40,507
Other assets 25,968 2,957
TOTAL ASSETS $453,790 $413,558
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $21,401 $18,073
Accrued liabilities 38,933 52,534
Other current liabilities 70 92
Total current liabilities 60,404 70,699
Other liabilities 7,355 7,381
Stockholders' Equity:
Preferred stock, $.01 par value; 5,000,000 shares
authorized, no shares issued and outstanding -- --
Common stock, $.02 par value; authorized:
200,000,000 shares; outstanding: September 30, 2000
- 64,439,812 shares; December 31, 1999 -
62,430,153 shares 1,288 1,248
Contributed capital 359,162 345,097
Retained earnings (deficit) 5,186 (10,867)
Accumulated other comprehensive income 20,395 --
Total stockholders' equity 386,031 335,478
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $453,790 $413,558
NET SALES BREAKOUT
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
By Product Segment:
2000 1999 2000 1999
Wireless Messaging
U.S. $21,456 $25,856 $52,400 $65,501
International 12,672 14,892 39,965 52,760
Subtotal 34,128 40,748 92,365 118,270
Enhanced Services Platform
U.S. 27,683 12,809 63,494 33,906
International 6,836 7,717 28,115 23,886
Subtotal 34,519 20,526 91,609 57,792
Totals $68,647 $61,274 $183,974 $176,062
SOURCE Glenayre Technologies, Inc.
CONTACT: Robbin Moore, Manager, Investor Relations of Glenayre
Technologies, Inc., 704-553-0038, or investor.relations@glenayre.com
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 111723
URL: glenayre.com
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