Elastic Year End Report
Thursday January 25, 8:14 am Eastern Time
Press Release
Elastic Networks Inc. Reports 2000 Fourth Quarter and Full Year Results
Company Reports Revenues of $13.9 Million for the Fourth Quarter and $39.8 Million for the Full Year
ALPHARETTA, Ga.--(BUSINESS WIRE)--Jan. 25, 2001-- Company Reports a Significant Gross Margin Improvement
Elastic Networks Inc. (NASDAQ: ELAS - news) today reported results for the fourth quarter ended December 31, 2000.
In the fourth quarter, the Company reported revenues of $13.9 million compared to revenues of $4.5 million for the quarter ended December 31, 1999, an increase of 211%. The pro forma net loss for the quarter ended December 31, 2000, excluding non-cash stock based expenses and accretion of series A preferred stock of $10.4 million, was $(6.1) million, or $(0.19) per share, compared with a pro forma net loss for the quarter ended December 31, 1999, excluding non-cash stock based expenses and accretion of series A preferred stock of $0.2 million, of $(7.9) million or $(0.25) per share. All outstanding shares of the Company's preferred stock were converted into common stock when the Company's initial public offering closed on October 4, 2000.
For the twelve months ended December 31, 2000, the Company reported revenues of $39.8 million compared to revenues of $8.2 million for the comparable period of 1999, an increase of 384%. The pro forma net loss for the twelve months ended December 31, 2000, excluding non-cash stock based expenses and accretion of series A preferred stock of $13.5 million, was $(25.8) million, or $(0.82) 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 $0.4 million, of $(20.6) million or $(0.66) per share.
``We are pleased with our fourth quarter results,'' said Guy Gill, President and Chief Executive Officer of Elastic Networks. ``We achieved our revenue goals, increased gross margins significantly and differentiated Elastic Networks as the last mile IP end-to-end solution for carriers deploying multi-media applications. New customer wins included Citizens Communications and Hargray Communications adding to our carrier customer base of over forty companies. Additionally, Elastic Networks announced a strategic partnership with Keval On-line Technology Development, Ltd. to manufacture and market our last mile IP over Ethernet solutions in China and other Asian countries.''
In 2000, Elastic Networks' accomplishments included:
Achieved revenue growth of 384% over 1999 to $39.8 million.
Expanded our carrier revenue base from approximately 20% to 40% of total revenues.
Grew our international revenues from approximately 9% to 27% of total revenues.
Expanded the product line with the introduction of our IP end-to-end StormSystem(TM) family including the BitStorm(TM) central office system and the MicroBurst(TM) remote system.
Increased our investment in research and development and sales and marketing and added capital resources through private funding and our initial public offering that closed in October 2000.
Extended our reach into Asia with the opening of the Hong Kong office and signing a partnership agreement with Keval On-line Technology Development, Ltd.
Announced a distribution agreement with Dynavar Networking Inc., one of Canada's largest value-added resellers of integrated network solutions.
Elastic Networks will host a conference call later today at 10:00 a.m. EST to discuss fourth quarter 2000 operating results and discuss the outlook for 2001. For listen-only access to our conference call within the U.S., please dial (800) 553-2720 by 9:45 a.m. EST on January 25th. Please use the confirmation code 905175 to access the call.
For the live Internet broadcast, please access the Elastic Networks' website at www.elastic.com, and then the Investor Relations section where there will be a ``Live Web-cast'' 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 21 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 905175. The replay will be available until Monday, January 29th.
About Elastic Networks Inc.
Elastic Networks (NASDAQ: ELAS - news) is a leader in innovative, next generation last mile IP solutions enabling telecommunications service providers to easily offer broadband multi-media applications. 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 technology in markets throughout the world. The company has offices in Alpharetta, GA, Toronto, and Hong Kong.
For more information about Elastic Networks and its high-speed access and subscriber management solutions, visit www.elastic.com, www.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 our product shipments and/or our various arrangements with our distributors, manufacturers or resellers may negatively impact our ability to make sales and/or minimize our 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 our 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 Twelve Months ended
December 31, December 31,
--------------------- --------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues:
Product $ 13,716 $ 4,288 $ 39,165 $ 7,565
License 143 163 591 650
-------- -------- -------- --------
Total revenues 13,859 4,451 39,756 8,215
Cost of revenues 11,721 6,937 35,914 14,290
-------- -------- -------- --------
Gross profit (loss) 2,138 (2,486) 3,842 (6,075)
Operating expenses:
Sales and marketing 4,180 2,334 14,346 5,169
Research and development 3,172 2,353 10,853 7,386
General and administrative 2,056 733 5,409 2,164
-------- -------- -------- --------
Total operating
expenses 9,408 5,420 30,608 14,719
-------- -------- -------- --------
Operating loss (7,270) (7,906) (26,766) (20,794)
-------- -------- -------- --------
Other income (expense), net 1,171 6 977 174
-------- -------- -------- --------
Pro forma net loss $ (6,099) $ (7,900) $(25,789) $(20,620)
======== ======== ======== ========
Pro forma net loss per share $ (0.19) $ (0.25) $ (.82) $ (0.66)
======== ======== ======== ========
Shares used in computing pro
forma per share 31,329 31,329 31,329 31,329
======== ======== ======== ========
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 December 31, 2000 excludes $10.4 million of
non-cash stock based expenses and $6 thousand of accretion on
series A preferred stock. The three months ended December 31, 1999
excludes $28 thousand of non-cash stock based expenses and $0.1
million of accretion on series A preferred stock.
(2) The twelve months ended December 31, 2000 excludes $13.1 million
of non-cash stock based expenses and $0.4 million of accretion on
series A preferred stock. The twelve months ended December 31,
1999 excludes $0.1 million of non-cash stock based expenses and
$0.3 million of accretion on series A preferred stock.
(3) The totals for pro forma net loss per share for the three and
twelve months ended December 31, 2000 and 1999 use the outstanding
shares of common stock of Elastic Networks Inc. as of December 31,
2000, which include shares issued after the October 4, 2000
initial public offering.
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 Twelve Months ended
December 31, December 31,
--------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues:
Product $ 13,716 $ 4,288 $ 39,165 $ 7,565
License 143 163 591 650
-------- -------- -------- --------
Total revenues 13,859 4,451 39,756 8,215
Cost of revenues 11,721 6,937 35,914 14,290
-------- -------- -------- --------
Gross profit (loss) 2,138 (2,486) 3,842 (6,075)
Operating expenses:
Sales and marketing 4,180 2,334 14,346 5,169
Research and development 3,172 2,353 10,853 7,386
General and administrative 2,056 733 5,409 2,164
Non-cash stock based
compensation 10,424 28 12,428 111
-------- -------- -------- --------
Total operating
expenses 19,832 5,448 43,036 14,830
-------- -------- -------- --------
Operating loss (17,694) (7,934) (39,194) (20,905)
-------- -------- -------- --------
Non-cash stock based
financing expense - - (657) -
Other income (expense), net 1,171 6 977 174
-------- -------- -------- --------
Net loss (16,523) (7,928) (38,874) (20,731)
-------- -------- -------- --------
Accretion of series A
preferred stock (6) (133) (405) (333)
-------- -------- -------- --------
Net loss attributable to
common stockholders $(16,529) $ (8,061) $(39,279) $(21,064)
======== ======== ======== ========
Basic and diluted net loss
per common share $ (0.54) $ (0.48) $ (1.94) $ (1.26)
======== ======== ======== ========
Weighted average shares
used in computing basic
and diluted net loss per
common share 30,683 16,671 20,208 16,671
======== ======== ======== ========
ELASTIC NETWORKS INC.
CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, December 31,
2000 1999
------------- ----------
Assets
Current assets:
Cash, cash equivalents and short-term
investments $ 68,591 $ 5,613
Accounts receivable, net 11,279 1,570
Inventories 5,223 759
Other 1,735 97
-------- --------
Total current assets 86,828 8,039
Property and equipment, net 3,375 1,352
Other assets 3,635 102
-------- --------
Total assets $ 93,838 $ 9,493
======== ========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities $ 13,232 $ 9,035
Deferred revenue, current 1,474 591
Capital lease obligation, current 216 45
-------- --------
Total current liabilities 14,922 9,671
Capital lease obligation, net of current portion 305 100
Deferred revenue, net of current portion 2,652 1,142
Redeemable convertible participating preferred
stock - 8,295
Stockholders' equity (deficit) 75,959 (9,715)
-------- --------
Total liabilities and stockholders'
equity (deficit) $ 93,838 $ 9,493
======== ========
--------------------------------------------------------------------------------
Contact:
Elastic Networks Inc.
Kevin D. Elop, 678/297-3100
irinfo@elastic.com
or
GCI Group
Thomas J. Rozycki, Jr., 212/537-8016
trozycki@gcigroup.com |
