ELAS Q:
(Applies to: ELAS)
Elastic Networks Inc. Reports Third Quarter Results; Company Reports
Revenues of $11.2 Million
ALPHARETTA, Ga., Nov 2, 2000 /PRNewswire via COMTEX/ -- Elastic Networks
Inc.
(Nasdaq: ELAS), today reported results for the third quarter ended
September 30,
2000.
In the third quarter, the Company reported revenues of $11.2 million
compared to
revenues of $1.2 million for the quarter ended September 30, 1999, an
increase
of 863%.
The pro forma net loss for the quarter ended September 30, 2000, excluding
non-cash stock based expenses and accretion of series A preferred stock of
$2.0
million, was $(7.2) million, or $(0.23) per share, compared with a pro
forma net
loss for the quarter ended September 30, 1999, excluding non-cash stock
based
expenses and accretion of series A preferred stock of $0.2 million, of
$(4.0)
million or $(0.13) per share.
"Our strong revenue growth for the third quarter demonstrates the viability
and
demand for our high-speed access products," said Guy Gill, President and
Chief
Executive Officer of Elastic Networks. "Our products continue to gain
acceptance
in the multi-tenant unit (MTU), incumbent telecommunications service
provider
and international markets. Our IP-based next generation access technology,
EtherLoop (TM), combines the best attributes of Ethernet and DSL to solve
the
current DSL industry challenges of complex deployment, reach and bandwidth
limitations."
Mr. Gill continued, "In the third quarter, we made good progress in the
execution of our growth plan. We continued our revenue diversification with
strong growth in the MTU segment, complemented by the addition of new
customers
in the carrier and international markets. We successfully effected our
initial
public offering on September 29, 2000, with net proceeds to the company of
$82
million. Additionally, we opened an international office in Hong Kong
during the
third quarter to expand our focus in the dynamic and growing Asian market."
For the nine months ended September 30, 2000, the Company reported revenues
of
$25.9 million compared to revenues of $3.8 million for the comparable
period of
1999, an increase of 588%.
The pro forma net loss for the nine months ended September 30, 2000,
excluding
non-cash stock based expenses and accretion of series A preferred stock of
$3.1
million, was $(19.7) million, or $(0.63) per share, compared with a pro
forma
net loss for the same period of 1999, excluding non-cash stock based
expenses
and accretion of series A preferred stock of $0.3 million, of $(12.7)
million or
$(0.41) per share.
Elastic Networks will host a conference call on Friday, November 3, 2000 at
10:00 a.m. EST to discuss third quarter 2000 operating results and the
outlook
for the rest of the year. For listen-only access to the conference call
within
the U.S., please dial 800-521-5428 by 9:45 a.m. EST on November 3rd. Please
use
the confirmation code 843110 to access the call.
For the live Internet broadcast, please access the Elastic Networks'
website at
elastic.com, and then the Investor Relations section where there
will
be a "Live Webcast" link. Please go to the website at least 15 minutes
prior to
the call to register, download and install any necessary audio software. A
replay will be available shortly after the call and will remain on the
Company's
website for 90 days.
A telephonic replay will also be available after the completion of the
call. To
access the recording, dial (800) 625-5288. Please use the confirmation code
843110. The replay will be available until Tuesday, November 7th.
About Elastic Networks Inc.
Elastic Networks is a leader in innovative, next generation DSL technology
and
high-speed Internet access solutions, enabling telecommunications service
providers to easily offer affordable broadband services that simplify the
way
people connect. By leveraging its technological differentiation in speed,
deployability, and economics, and by building strategic relationships with
distributor, chip manufacturing, and data networking partners, Elastic
Networks
continues to increase the pervasiveness of its innovative technology in
markets
throughout the world.
For more information about Elastic Networks and its high-speed access and
subscriber management solutions, visit elastic.com,
speedupamerica.com, or contact Elastic's U.S. headquarters in
Alpharetta, Georgia, directly at 678-297-3100. For investor information
e-mail
Elastic at irinfo@elastic.com or call 678-297-3100.
Forward-Looking Statements
Certain of the statements contained in this release are forward-looking
statements (rather than historical facts) that are subject to risks and
uncertainties that could cause actual results to differ materially from
those
described. With respect to such forward-looking statements, the Company
seeks
the protections afforded by the Private Securities Litigation Reform Act of
1995. These risks include, without limitation, (1) that the Company may
fail to
be competitive with existing and new competitors, (2) that the Company may
not
maintain or grow its level of revenues, given its currently limited
customer
base, (3) that the Company's limited number of product offerings may fail
to
achieve widespread market acceptance, (4) that negative changes in customer
demands and requirements regarding our prices, technology and products may
occur, (5) that DSL technology may fail to achieve widespread market
penetration, (6) that interruptions or disruptions in the Company's product
shipments and/or the Company's various arrangements with its distributors,
manufacturers or resellers may negatively impact its ability to make sales
and/or minimize its costs, (7) that the Company may not adequately respond
to
technological and regulatory developments impacting the telecommunications
industry, (8) that needed financing may not be available to the Company if
and
as needed, (9) that a decline in the size and potential growth of the MTU,
carrier and international markets for the Company's technology may occur,
(10)
that a significant reversal in the trend toward increased usage of the
Internet
may occur, (11) that a drastic, negative change in the U.S. economy or
market
conditions may occur, and (12) that some other unforeseen difficulties may
occur
from time to time. This list is intended to identify certain of the
principal
factors that could cause actual results to differ materially from those
described in the forward-looking statements included elsewhere herein.
These
factors are not intended to represent a complete list of all risks and
uncertainties inherent in the Company's business, and should be read in
conjunction with the more detailed cautionary statements included elsewhere
in
the Company's most recent filings with the SEC.
ELASTIC NETWORKS INC.
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended Nine Months ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
Product $11,061 $1,002 $25,449 $3,277
License 143 162 448 487
Total revenues 11,204 1,164 25,897 3,764
Cost of revenues 10,062 1,844 24,193 7,353
Gross profit (loss) 1,142 (680) 1,704 (3,589)
Operating expenses:
Sales and marketing 3,963 1,001 10,045 2,835
Research and
development 2,924 1,717 7,681 5,033
General and
administrative 1,256 750 3,474 1,431
Total operating
expenses 8,143 3,468 21,200 9,299
Operating loss (7,001) (4,148) (19,496) (12,888)
Other income
(expense), net (247) 132 (194) 168
Pro forma net loss $(7,248) $(4,016) $(19,690) $(12,720)
Pro forma net loss per
share - diluted $(0.23) $(0.13) $(0.63) $(0.41)
Shares used in computing
pro forma per
share - diluted 31,306 31,306 31,306 31,306
The above Pro Forma Condensed Statements of Operations is not a
presentation in accordance with generally accepted accounting
principles
as it excludes the effects of the following:
(1) The three months ended September 30, 2000 excludes $1.9 million of
non-cash stock based expenses and $0.1 million of accretion on series A
preferred stock. The three months ended September 30, 1999 excludes
$0.1 million of non-cash stock based expenses and $0.1 million of
accretion on series A preferred stock.
(2) The nine months ended September 30, 2000 excludes $2.7 million of
non-cash stock based expenses and $0.4 million of accretion on series A
preferred stock. The nine months ended September 30, 1999 excludes
$0.1 million of non-cash stock based expenses and $0.2 million of
accretion on series A preferred stock.
(3) The totals for pro forma net loss per share - diluted for the three
and nine months ended September 30, 1999 and 2000 use the outstanding
shares of common stock of Elastic Networks Inc. immediately after its
initial public offering (IPO). The pro forma data is presented for
informational purposes only and should not be considered as a
substitute
for the historical financial data presented in accordance with
generally
accepted accounting principles.
ELASTIC NETWORKS INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended Nine Months ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
Product $11,061 $1,002 $25,449 $3,277
License 143 162 448 487
Total revenues 11,204 1,164 25,897 3,764
Cost of revenues 10,062 1,844 24,193 7,353
Gross profit (loss) 1,142 (680) 1,704 (3,589)
Operating expenses:
Sales and marketing 3,963 1,001 10,045 2,835
Research and
development 2,924 1,717 7,681 5,033
General and
administrative 1,256 750 3,474 1,431
Non-cash stock based
compensation 1,187 27 2,004 83
Total operating
expenses 9,330 3,495 23,204 9,382
Operating loss (8,188) (4,175) (21,500)
(12,971)
Non-cash stock based
financing expense (657) - (657) -
Other income
(expense), net (247) 132 (194) 168
Net loss (9,092) (4,043) (22,351)
(12,803)
Accretion of series
A preferred stock (133) (133) (399)
(200)
Net loss attributable
to common
stockholders $(9,225) $(4,176) $(22,750)
$(13,003)
Basic and diluted net
loss per
common share $(0.55) $(0.25) $(1.36) $(0.78)
Weighted average shares
used in computing basic
and diluted net loss
per common share 16,691 16,670 16,680 16,670
ELASTIC NETWORKS INC.
CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
Pro Forma
September 30, September 30, Dec. 31,
2000 2000 1999
Assets
Current assets:
Cash, cash equivalents and
short-term investments $84,607 $9,720 $5,613
Accounts receivable, net 3,681 3,681 1,570
Inventories 5,870 5,870 759
Other 49 1,374 97
Total current assets 94,207 20,645 8,039
Property and equipment, net 2,855 2,855 1,352
Other assets 102 102 102
Total assets $97,164 $23,602 $9,493
Liabilities and Stockholders'
Equity (Deficit)
Current liabilities:
Line of credit $-- $6,000 $--
Accounts payable and
accrued liabilities 12,679 14,004 9,035
Deferred revenue, current 571 571 591
Capital lease obligation,
current 197 197 45
Total current liabilities 13,447 20,772 9,671
Capital lease obligation, net
of current portion 309 309 100
Deferred revenue, net of
current portion 825 825 1,142
Redeemable convertible
participating preferred stock -- 30,994 8,295
Stockholders' equity (deficit) 82,583 (29,298) (9,715)
Total liabilities and
stockholders'
equity (deficit) $97,164 $23,602 $9,493
The above Pro Forma Condensed Balance Sheet is not a presentation in
accordance with generally accepted accounting principles as it includes
the effects resulting from the closing of our IPO on October 4, 2000:
(1) Cash and cash equivalents and short-term investments includes
$74,887
of proceeds net of repayments of $6,000 for the line of credit and
$1,325
for IPO related expenses.
(2) Other current assets include the reduction of $1,325 for the
elimination of deferred IPO expenses.
(3) Line of credit includes the elimination of the $6,000 pre-IPO
liability.
(4) Accounts payable and accrued liabilities include the reduction of
$1,325 related to IPO expenses.
(5) Redeemable convertible participating preferred stock converts to
common stock at IPO.
(6) Stockholders' equity (deficit) includes $80,887 from proceeds of
the
IPO, net of $1,325 accrued IPO expenses, plus the conversion of
redeemable
convertible participating preferred stock.
The pro forma data is presented for informational purposes only and
should
not be considered as a substitute for the historical financial data
presented in accordance with generally accepted accounting principles.
SOURCE Elastic Networks Inc.
CONTACT: Kevin Elop of Elastic Networks, 678-297-3100,
irinfo@elastic.com; or Charlotte Ostor of GCI Group,
212-537-8006, or
costor@gcigroup.com, for Elastic Networks
URL: elastic.com
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