Glenayre Technologies Reports 4th Quarter and Year-End 2000
Earnings Glenayre Reports Revenue of $251.6 Million for 2000 Enhanced Services
Platform/Unified Messaging Revenue Increased 45 percent over 1999 Wireless
Device Revenue increased more than 50 percent over 1999
CHARLOTTE, N.C., Feb 6, 2001 /PRNewswire via COMTEX/ -- Glenayre Technologies
Inc. (NASDAQ: GEMS) today announced 2000 net income of $14.1 million, or $0.21
per share. Excluding one-time gains and charges, 2000 earnings would have been
$0.03 per share compared with ($0.26) loss per share for 1999. Total 2000
revenue increased 6 percent to $251.6 million compared with 1999 revenue of
$238.1 million. Enhanced Service Platform/Unified Messaging (ESP/UM) 2000
revenue increased 45 percent to $122.4 million, accounting for 49 percent of
total 2000 revenue, compared with 35 percent for 1999. Wireless device 2000
revenue increased 55 percent to $33.1 million. As expected, 2000 wireless
messaging infrastructure revenue decreased 27 percent to $96.1 million.
For the quarter ended December 31, 2000, Glenayre reported a ($0.03) loss per
share, which is in line with the company's previous guidance and expectations.
Results for the quarter reflect previously announced strategic investments for
research and development (R&D) and marketing programs as well as a change in
product mix. Revenue for the quarter was $67.6 million compared with $62.0
million for the same quarter last year, a 9 percent increase. ESP/UM product
revenue of $30.7 million increased 17 percent compared with $26.4 million
reported in the fourth quarter 1999. Wireless Messaging product revenue
increased 3 percent to $36.9 million compared with $35.6 million reported in the
fourth quarter 1999. Significant growth in wireless device revenue offset
declining wireless infrastructure revenue to account for the Wireless Messaging
results.
Operating loss for fourth quarter 2000 was ($4.3) million compared with a loss
of ($3.7) million for the fourth quarter last year. Operating expense increased
$3.4 million compared with fourth quarter 1999. This increase reflects the
planned strategic investments for R&D and cooperative marketing campaigns to
support the company's growth strategy. Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) was a positive $1.0 million for the
fourth quarter 2000 compared with a positive $1.8 million for the same quarter
last year.
"Glenayre's financial results for the fourth quarter were in line with our
expectations. During the quarter we made strategic investments in marketing
programs and R&D that will help drive growth in 2001," stated Bert Klein, Senior
Vice President and Chief Financial Officer. "We continue to maintain a strong
balance sheet with no debt and have no concerns about our ability to self fund
our growth strategy."
Glenayre announced several strategic partnerships and alliances in the fourth
quarter 2000 that should increase the company's visibility. Key developments for
the quarter included:
* WebLink Wireless, a leader in the wireless data industry, signed an
agreement to purchase $20 million in wireless network infrastructure
equipment and software through 2001.
* Glenayre announced its alliance with PhoneOnline.com, a leading wireless
software development and professional services firm, to support
interoperability between PhoneOnline.com's Blue Moon(TM) mobile software
technology applications. PhoneOnline.com will use the @ctiveLink(TM)
module and BlueMoon technology to create a low-cost wireless data
solution for DRIVERNet, Inc.
* Glenayre established a modem card license agreement with Qualcomm, a
world leader of Code Division Multiple Access (CDMA) digital
technology. Using the modem card license, Glenayre will develop next
generation CDMA-based wireless modules and devices that integrate
wireless voice and data services to a variety of personal communication
clients that operate on CDMA digital networks.
* Glenayre established a strategic agreement with Vast Solutions, Inc., a
provider of Mobile Resource Management products, to support
interoperability between the @ctiveLink two-way wireless messaging
module and the Vast viaduct(TM) software architecture.
* Glenayre announced that the @ctiveLink module bundled with the
Handspring(TM) Visor(TM) is available through Gateway centers.
* The @ctiveLink module is available as a standalone unit for use with
Handspring Visor handheld computers through key distribution points
including the Handspring store within the PalmGear.com Web site.
"The year 2000 was key for Glenayre as we completed our financial turnaround,
refined the company's strategic path, and invested in areas that we believe will
fuel the long-term growth of the company," stated Eric Doggett, President and
Chief Executive Officer. "Over the past year we have achieved a number of
milestones. We exceeded our 2000 goal to deliver 30 percent revenue growth over
1999 for our ESP/UM products which increased by 45 percent. We increased the
number of network customers we serve with our ESP/UM products by 23 percent, and
derive over 85 percent of our ESP/UM revenue from high growth GSM, CDMA, TDMA,
and ESMR wireless carriers. Our wireless device strategy, with the award winning
@ctive Link module, has been received favorably by our customers and partners.
In fact, fourth quarter 2000 device revenue reached record levels and total year
revenue increased by more than 50 percent over the previous year. These
accomplishments drove Glenayre's ability to deliver a $33 million improvement
over 1999 in operating earnings excluding adjustments and a $0.29 per share
improvement in adjusted earnings per share.
Glenayre's vision is to lead the convergence of unified messaging, wireless, and
the Internet. During 2000 we invested heavily into high growth market
opportunities. We plan to deliver more new products this year than ever. This
includes a suite of unified messaging products that we believe will uniquely
address the needs of end-users with converged services for both their work and
home lives -- a new release of which was just announced this month. We are
currently taking our network-assisted GPS location product through alpha testing
and have successfully demonstrated its superior resolution and building
penetration capabilities. This will be incorporated into a location tag, an
asset tag, and a new @ctiveLink III during this year. We are also delivering
software this year that will increase our ReFLEX customers capacity 10-fold
while reducing latency over 75 percent."
Doggett continued, "Last quarter we provided explicit guidance, and we still
stand behind this guidance. As a significant amount of our forecasted revenue
growth for 2001 is tied to mid-year product introductions, the forecast is
second-half weighted. The current analysts' consensus view for 2001 is that
Glenayre will deliver approximately 20 percent revenue growth, or $300 million,
with a net loss for the year of ($0.03) per share. This reflects their risk
factors, which they have assigned to our previous guidance, as the second half
of the year is dependent on these new product introductions. We feel comfortable
with their models at this point, though we will continue to drive higher and we
will revisit our guidance as we get closer to the second half of the year."
A teleconference regarding Glenayre's third quarter earnings will be held
Wednesday, February 7, 2001, at 8:30 a.m. Eastern Time. To listen to the call,
please dial 913-981-5509. The conference call also will be simulcast on
www.glenayre.com . Audio replay of the call will be available for one week from
February 7, 2001, by calling 719-457-0820 and entering access code #413975.
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(TM) 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(TM)
two-way messaging devices; an array of Enhanced Services Platform/Unified
Messaging 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 2000 net sales exceeding $251 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 revenues and earnings results, and are based upon the company's
current forecasts, expectations and assumptions, which are subject to a number
of risks and uncertainties that could cause the actual outcomes and results to
differ materially. These results and uncertainties are discussed in the
company's most recently filed Form 10-Q. These factors may include: dependence
on new product development; availability of manufacturing components and
materials; control of costs and expenses; potential product mix changes which
affect the company's overall profit margin; 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.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
2000 1999 2000 1999
NET SALES $67,610 $62,027 $251,585 $238,089
COSTS AND EXPENSES:
Cost of Sales 34,835 32,052 117,180 135,597
Selling, General &
Administrative 20,381 20,299 72,430 81,334
Provision for doubtful
receivables 1,013 (1,136) 2,433 66,999
Research & Development 10,415 9,513 39,450 40,831
Depreciation &
Amortization 5,283 5,515 20,461 29,860
Write-off of goodwill
and other intangibles -- -- -- 50,919
Adjustment to loss on
sale of business -- (554) (524) (554)
Unrealized loss on
subordinated notes -- 72 -- 8,172
Total costs and
expenses 71,927 65,761 251,430 413,158
INCOME (LOSS) FROM
OPERATIONS (4,317) (3,734) 155 (175,069)
OTHER INCOME (EXPENSES):
Interest Income 1,810 1,253 6,504 5,699
Interest Expense (7) (117) (60) (397)
Gain (loss) on disposal
of assets (12) (757) 366 (4,431)
Escrow Settlement 320 -- 11,177 --
Gain on sale of
available-for-sale
securities 1,142 -- 1,142 --
Other, net (99) 511 (509) 483
Total other income 3,154 890 18,620 1354
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES (1,163) (2,844) 18,775 (173,715)
PROVISION (BENEFIT) FOR
INCOME TAXES 788 (745) 4,673 (45,967)
INCOME (LOSS) FROM
CONTINUING OPERATIONS (1,951) (2,099) 14,102 (127,748)
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS
(NET OF INCOME TAX) -- (2,759) -- (780)
NET INCOME (LOSS) ($1,951) ($4,858) $14,102 ($128,528)
INCOME (LOSS) PER COMMON SHARE:
Income from continuing
operations ($0.03) ($0.03) $0.21 ($2.06)
Discontinued operations -- (0.04) -- (0.01)
Net Income (loss) per
common share ($0.03) ($0.08) $0.21 ($2.07)
Number of shares used to compute
per share data 64,451 62,246 66,966 62,182
Glenayre Technologies Inc.
Consolidated Balance Sheets
(Dollars In thousands)
December 31,
2000 1999
ASSETS
Current Assets:
Cash and cash
equivalents $71,866 $73,513
Restricted cash 16,893 10,355
Accounts receivable,
net
94,977 88,736
Notes receivable 4,434 7,083
Inventories 40,104 28,130
Deferred income taxes 19,140 16,668
Prepaid expenses and
other current assets 6,177 4,249
Total current assets 253,591 228,734
Notes receivable, net 7,224 4,707
Property, plant and
equipment, net 89,055 88,654
Goodwill, net 45,311 47,999
Deferred income taxes 34,917 40,507
Other assets 15,988 2,957
TOTAL ASSETS $446,086 $413,558
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $25,150 $18,073
Accrued liabilities 43,299 52,534
Other current liabilities____66 _______92
Total current
liabilities 68,515 70,699
Other liabilities 6,644 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:
2000 -
64,446,012 shares;
1999 -
62,430,153 shares 1,288 1,248
Contributed capital 359,181 345,097
Retained earnings
(deficit) 3,235 (10,867)
Accumulated other
comprehensive income 7,223 --
Total stockholders'
equity 370,927 335,478
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $446,086 $413,558
NET SALES BREAKOUT
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
By Product Segment: 2000 1999 2000 1999
Wireless Messaging
U.S. $27,214 $15,930 $79,619 $81,429
International 9,642 19,713 49,604 72,484
Subtotal 36,856 35,643 129,223 153,913
Enhanced Services Platform
U.S. 23,584 10,659 87,074 44,568
International 7,170 15,725 35,288 39,608
Subtotal 30,754 26,384 122,362 84,176
Totals $67,610 $62,027 $251,585 $238,089
SOURCE Glenayre Technologies Inc.
CONTACT: Robbin E. Moore, Manager - Investor Relations of Glenayre,
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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(C) 2001 PR Newswire. All rights reserved.
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