Tekelec Reports Record First Quarter Results
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CALABASAS, Calif.--(BUSINESS WIRE)--April 17, 2001--Tekelec (Nasdaq:TKLC - news) today reported financial results for its first quarter ended March 31, 2001.
Revenues for the first quarter increased 40 percent to a first quarter record $84.3 million from $60.1 million in the first quarter of 2000. Pro forma net income, which excludes the effects of acquisition-related amortization, increased 60 percent to $8.0 million, or $0.13 per diluted share, compared to pro forma net income of $5.0 million, or $0.08 per diluted share, in the first quarter of 2000. The Company's solid financial performance reflects healthy revenue growth across all operating divisions, with particular strength in the Network Systems Division.
Orders for the Company's products in the first quarter increased 23 percent to $89.3 million from $72.5 million in last year's first quarter. Total backlog at March 31, 2001 grew to $202.2 million, consisting of $111.9 million in product backlog and $90.3 million in multi-year service agreements.
Inclusive of merger charges, actual net income for the first quarter of 2001 was $1.4 million, or $0.02 per diluted share, compared to a net loss of $1.8 million, or $0.03 per share, in the first quarter of 2000.
Tekelec President and CEO Michael L. Margolis commented, ``Our strong results, achieved during a period of selective spending by telecom service providers, highlight the critical role Tekelec solutions play in enabling a variety of revenue-generating services featuring voice and data technologies. Moreover, growing minutes of use and new enhanced services, particularly evident on wireless networks, are powerful drivers of investment in our signaling infrastructure and service applications.''
Recent operating highlights include:
Continued strong demand from wireless operators and wireless equipment manufacturers, which accounted for nearly 50% of total revenues in the quarter. Wireless contributors to our first quarter revenues included AT&T Wireless, Cingular, Nextel, VoiceStream and Verizon Wireless.
Our largest order to date for IP7 Secure Gateways, which enable signaling over Internet Protocol (IP), with initial deliveries under the contract scheduled for the second quarter of 2001. Our IP7 Secure Gateways will play a critical role in ensuring the reliability and features for the major carrier's rollout of voice-over-IP services internationally.
The introduction of EAGLE® 5 Signaling Application System (SAS), resulting in a ten-fold increase in the EAGLE platform's capacity potential, a 300 percent increase in connectivity, and support for SS7 over IP signaling in next-generation networks. EAGLE 5 also uniquely features an integrated platform for prepackaged service applications such as calling name delivery and 800/toll free calling, as well as a service creation environment to develop new features.
Continuing growth within our Network Diagnostics Division related to deployments of our MGTS platform for SS7/IP testing, and increasingly, diagnostics for third-generation (3G) wireless networks. Growing demand for our solutions led to a 38 percent increase in diagnostics revenue from a year ago.
Within our IEX Contact Center division, we extended the capabilities of TotalNet(TM) Call Routing to support interactive voice response (IVR) systems in customer service environments. TotalNet version 5 also includes support for additional automatic call distribution (ACD) systems, including new interfaces for Nortel Meridian MAX, Avaya Definity, Rockwell Spectrum, and eOn eQueue.
2001 Guidance
As highlighted below, the Company reiterates its 2001 guidance initially communicated on January 30, 2001, and initiated guidance for the second quarter ending June 30, 2001. The pro forma earnings per share assumptions noted below exclude the effects of merger-related charges and non-recurring charges and benefits.
Second Quarter, 2001 Expected Growth vs Q2 2000
Revenue Guidance $88-$90 million 19%-21%
Pro forma EPS Guidance $0.16 per diluted share 14%
Full Year, 2001 Expected Growth vs FY 2000
Revenue Guidance $390-$400 million 24%-27%
Pro forma EPS Guidance $0.85-$0.88 per diluted share 29%-33%
``While we are not immune to the macro environment affecting our industry, we continue to be cautiously optimistic about our 2001 growth outlook as our guidance reinforces,'' Margolis concluded. ``Our confidence stems from our healthy backlog visibility, particularly relating to the second quarter, and our strong competitive position within an industry segment that requires continual investment in capacity to support growth in network traffic.''
Q1 Results Teleconference Webcast
Tekelec will conduct a teleconference for the financial community at 4:45 p.m. EDT today to discuss its first quarter financial results. A real-time audio broadcast of the teleconference will be available within the Investor Relations section of Tekelec's web site located at tekelec.com. Following the completion of the call, the webcast will be archived on the Tekelec web site for 45 days. In addition, Tekelec will also provide a telephone recording of the teleconference, which will be available at approximately 7:00 p.m. EDT this evening for 48 hours. Interested persons may listen to the playback of the teleconference by calling the following toll-free number: 800/633-8284, and entering the reservation number, 18403630.
Tekelec is a leading developer of telecommunications signaling infrastructure, softswitches, diagnostic solutions, and service applications. The company's highly reliable solutions enable telecommunications carriers and equipment suppliers to achieve the benefits of the packet-telephony revolution, while keeping service quality and feature richness intact. Tekelec's innovative solutions are widely deployed in traditional and next-generation wireline, wireless, and IP voice and data communications networks and contact centers. Corporate headquarters are located in Calabasas, California, with research and development facilities and sales offices worldwide. For more information, please visit tekelec.com.
Certain statements made in this news release are forward looking, reflect the Company's current intent, belief or expectations and involve certain risks and uncertainties. There can be no assurance that the Company's actual future performance will meet the Company's expectations. As discussed in the Company's 2000 Annual Report on Form 10-K and other filings with the SEC, the Company's future operating results are difficult to predict and subject to significant fluctuations. Factors that may cause future results to differ materially from the Company's current expectations include, among others: timing of significant orders and shipments, product mix, capital spending patterns of customers, market acceptance of the Company's products, carrier deployment of intelligent network services, the level and timing of research and development expenditures, the timely development and introduction of new products, regulatory changes and general economic conditions. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Note to Editors: Tekelec logo and EAGLE are registered trademarks of Tekelec. IP7 and IP7 Secure Gateway are trademarks of Tekelec. IEX and TotalNet are trademarks of IEX Corporation.
TEKELEC
PRO FORMA (a) STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
2001 2000
(thousands, except per share data)
Revenues $84,315 $60,062
Costs and expenses:
Cost of goods sold 26,873 19,893
Research and development 18,674 12,239
Selling, general and administrative 26,918 19,362
Income from operations 11,850 8,568
Interest and other income (expense), net 521 (709)
Income before provision for income taxes 12,371 7,859
Provision for income taxes (b) 4,330 2,829
Pro forma net income $ 8,041 $ 5,030
Pro forma earnings per share:
Basic $ 0.14 $ 0.09
Diluted 0.13 0.08
Pro forma weighted average number of
shares outstanding:
Basic 59,037 56,537
Diluted 62,426 63,856
Notes to pro forma Statements of Operations ($000):
(a) The above pro forma statements of operations exclude the effects
of:
-- The amortization of goodwill, purchased technology and other
intangibles amounting to $7,816 and $8,072 related to the
acquisition of IEX, for the three months ended March 31, 2001
and 2000, respectively.
(b) The pro forma statements of operations assume effective tax rates
of 35% and 36% for the three months ended March 31, 2001 and 2000,
respectively.
TEKELEC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
2001 2000
(thousands, except per share data)
Revenues $84,315 $60,062
Costs and expenses:
Cost of goods sold 26,684 19,752
Amortization of purchased technology 2,589 2,541
Research and development 18,674 12,239
Selling, general and administrative 26,918 19,362
Amortization of goodwill and other
intangibles 5,416 5,672
Income from operations 4,034 496
Interest and other income (expense), net 521 (709)
Income (loss) before provision for income
taxes 4,555 (213)
Provision for income taxes (a) 3,186 1,589
Net income (loss) $ 1,369 $(1,802)
Earnings (loss) per share:
Basic $ 0.02 $ (0.03)
Diluted 0.02 (0.03)
Weighted average number of shares
outstanding:
Basic 59,037 56,537
Diluted 62,426 56,537
(a) Provision for income taxes for the three months ended March 31,
2001 and March 31, 2000 includes the effect of nondeductible
acquisition-related costs, and a benefit of $1,144 and $1,240,
respectively, for the utilization of deferred tax liabilities
related to certain of these acquisition-related costs.
TEKELEC
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, Dec. 31,
2001 2000
(thousands)
ASSETS
Current assets:
Cash and cash equivalents $193,442 $ 65,690
Short-term investments, at fair value 15,000 81,723
Accounts and notes receivable, net 75,708 104,506
Inventories 26,268 25,868
Deferred income taxes, net 14,092 14,429
Prepaid expenses and other current
assets 11,563 11,596
Total current assets 336,073 303,812
Long-term investments, at fair value 6,000 12,000
Property and equipment, net 35,602 31,700
Deferred income taxes, net 3,162 2,964
Other assets 4,154 3,825
Intangible assets 96,335 104,223
Total assets $481,326 $458,524
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of deferred revenues $ 52,585 $ 31,832
Other current liabilities 52,776 53,045
Total current liabilities 105,361 84,877
Long-term convertible debt 120,176 119,269
Long-term portion of deferred revenues 1,920 2,223
Deferred income taxes 13,415 14,558
Total liabilities 240,872 220,927
Shareholders' equity 240,454 237,597
Total liabilities and shareholders'
equity $481,326 $458,524
--------------------------------------------------------------------------------
Contact:
Tekelec, Calabasas
Erik Randerson, 818/880-7821
erik.randerson@tekelec.com |
