DITC loser( $16 dwn $13) revs down YoY of 58%
MOUNTAIN VIEW, Calif., May 24 /PRNewswire/ -- Ditech Communications Corporation (Nasdaq: DITC - news) today reported results for its fourth quarter and annual results for its fiscal year ended April 30, 2001. Ditech Communications closed its 2001 fiscal year with revenue of $121.7 million, an increase of 4% over revenues of $116.9 million from the previous year. Revenues for the fourth quarter ended April 30, 2001 were $19.7 million, down 58 percent from revenues of $46.8 million in the same quarter last year.
Pro forma results, which exclude non-cash charges associated with acquisitions such as amortization of goodwill, deferred stock compensation, and purchased research and development were:
-- Net income for the fourth quarter of fiscal 2001 of $165,000, down from
income of $16.2 million in the same quarter last year.
-- Diluted earnings per share for the fourth quarter of fiscal 2001 of
$0.01 compared to $0.54 for the same quarter last year.
-- Net income for fiscal 2001 of $27.7 million, down from $37.2 million
for fiscal 2000.
-- Diluted earnings per share for fiscal 2001 of $0.91, down from
$1.38 for fiscal 2000.
Actual results were:
-- Net loss for the fourth quarter of fiscal 2001 of $7.2 million
compared to net income of $8.9 million in the same quarter last year.
-- Diluted loss per share for the fourth quarter was $0.25 per share
compared to diluted net income of $0.30 per share for the same quarter
last year.
-- Net income for fiscal 2001 was $2.1 million, compared to $29.9 million
for fiscal 2000.
-- Diluted earnings per share for fiscal 2001 were $0.07 compared to
$1.11 for fiscal 2000.
``While the current market for telecom equipment continues to be very challenging, we're pleased to have achieved these results this quarter, which met projections made during our last conference call,'' said Tim Montgomery, Ditech's chairman, president and CEO. ``We shipped a large volume of the OC-3 echo canceller, our fifth generation product and the industry's highest density echo canceller. We continue to believe that the OC-3 and the STM-1, the international version of the product, will win new customers for Ditech in the coming year. We're also very pleased to have doubled our optical subsystem product revenue, generating over $17 million this year compared to $8 million the previous year.''
Continued Montgomery, ``Ditech has the cash reserves to weather this current industry downturn, but we're not simply waiting for our customers' capital expenditure levels to increase. We're investing in and extending our lead in echo cancellation technology, and we believe that we will see the benefits of this investment when economic conditions improve. Moreover, we've made significant changes to the overall company focus, aligning our engineering, marketing and customer support organizations to target the long-haul optical transport, one of the largest market opportunities for telecom equipment. Our history of building and selling optical subsystems provides us with the market experience and optical transmission foundation on which to launch Altamar Networks, our new optical systems subsidiary. We're investing in the company's future by creating Titanium, which we believe will be the industry's most integrated, and scalable optical long-haul transport system. Titanium will be the type of product that can materially change the business model of service providers. We believe Titanium will simultaneously lower costs while dramatically improving the service providers' ability to deliver revenue-generating services. For these reasons, we end the year confident that we're executing on a plan to deliver great value to our customers and tremendous opportunity for both our employees and investors.''
Management Outlook
Due to the current downturn in service providers' capital expenditures, the fact that Ditech is uncertain as to when or if spending will return to more robust levels, and the uncertainty about demand by certain major customers, Ditech projects revenues for the Q1 and Q2 of fiscal 2002 will decline from the current quarter.
Ditech Communications
Ditech Communications Corporation is a global telecommunications equipment supplier for voice and optical networks. Ditech's voice products are high-capacity echo cancellers that utilize advanced software and digital signal processor (DSP) technology. This unique combination of software and hardware allows Ditech to deliver Voice Quality of Service (VQoS(TM)), a robust and cost-effective solution for voice enhancement (including noise reduction) and echo cancellation. Ditech also develops and markets optical subsystems and systems communications products. Ditech's optical subsystem products include optical amplifiers, transponders and network management products that enable service providers to cost-effectively expand and extend the reach of fiber optic networks. Ditech (DITC) is listed on the Nasdaq National Market and is headquartered in Mountain View, California (web site: ditechcom.com ). Ditech is also developing and marketing its Titanium optical transport system product through its subsidiary, Altamar Networks ( altamar.com ).
Forward-Looking Statements
This press release contains forward-looking statements, including Ditech's estimates of its future financial results and its expectations regarding its OC-3 and STM-1 echo cancellation products, as well as its Titanium optical transport system product. Actual results could differ materially as a result of unanticipated factors and events, including: the fact that the financial estimates are inherently speculative, and unanticipated events could cause the actual results to differ substantially from Ditech's expectations; the risk that Ditech may experience delays in developing its new echo cancellation and optical products due to unforeseen technical or other difficulties; the risk that Ditech may experience component supply problems as a result of factors beyond its control; infrastructure demand could continue to weaken or remain flat due to the weakness in the economy or for other unanticipated reasons; the risk that the market will not accept Ditech's OC-3, STM-1 or Titanium products due to a number of reasons, including unwillingness to convert to new technology; the risk that Ditech's competitors will develop products that compete favorably with Ditech's new products; the risk that Ditech has a limited number of customers, the loss or reduction in sales to any one which could cause its revenues to decrease materially; as well as those detailed in the ``Risk Factors'' section of Ditech's Form 10-K/A for the year ended April 30, 2000 (filed August 10, 2000 with the Securities and Exchange Commission).
Ditech Communications Corporation
Pro Forma Consolidated Statements of Operations
For the Three Month Periods and Years Ended April 30, 2001 and 2000
(dollars in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
April 30, April 30,
2001 2000 2001 2000
Revenue $19,743 $46,766 $121,714 $116,946
Cost of goods sold 6,710 13,296 38,486 34,913
Gross profit 13,033 33,470 83,228 82,033
Operating expenses:
Sales and marketing 4,550 3,116 13,587 9,411
Research and development 7,577 2,427 20,467 6,647
General and administrative 1,762 1,379 6,671 4,296
Total operating expenses 13,889 6,922 40,725 20,354
Income (loss) from operations (856) 26,548 42,503 61,679
Other income, net 1,143 899 4,853 1,545
Income before taxes 287 27,447 47,356 63,224
Provision for income taxes 122 11,227 19,692 25,879
Net income 165 16,220 27,664 37,345
Accretion on preferred stock -- -- -- 99
Net income attributable to common
stockholders $165 $16,220 $27,664 $37,246
Per share data:
Basic $0.01 $0.59 $0.98 $1.58
Diluted $0.01 $0.54 $0.91 $1.38
Weighted shares used in per share
calculation:
Basic 28,879 27,392 28,145 23,505
Diluted 30,618 29,987 30,512 27,016
Ditech Communications Corporation
Consolidated Statements of Operations
For the Three Month Periods and Years Ended April 30, 2001 and 2000
(dollars in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
April 30, April 30,
2001 2000 2001 2000
Revenue $19,743 $46,766 $121,714 $116,946
Cost of goods sold 6,710 13,296 38,486 34,913
Gross profit 13,033 33,470 83,228 82,033
Operating expenses:
Sales and marketing 4,629 3,116 13,821 9,411
Research and development 10,887 4,339 34,372 8,559
General and administrative 1,777 1,379 6,716 4,296
Purchased research and
development -- 8,684 -- 8,684
Amortization of goodwill and
other intangibles 6,017 1,860 20,124 1,860
Total operating expenses 23,310 19,378 75,033 32,810
Income (loss) from operations (10,277) 14,092 8,195 49,223
Other income, net 1,143 899 4,853 1,545
Income (loss) before taxes (9,134) 14,991 13,048 50,768
Provision for (benefit from) income
taxes (1,960) 6,113 10,952 20,765
Net income (loss) (7,174) 8,878 2,096 30,003
Accretion on preferred stock -- -- -- 99
Net income (loss) attributable to
common stockholders ($7,174) $8,878 $2,096 $29,904
Per share data:
Basic ($0.25) $0.32 $0.07 $1.27
Diluted ($0.25) $0.30 $0.07 $1.11
Weighted shares used in per share
calculation:
Basic 28,879 27,392 28,145 23,505
Diluted 28,879 29,987 30,512 27,016
Ditech Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
April 30, April 30,
2001 2000
Assets
Cash and cash equivalents $110,132 $88,616
Accounts receivable, net 17,108 20,349
Inventories 15,523 6,596
Deferred income taxes 998 1,839
Other current assets 3,819 1,764
Total current assets 147,580 119,164
Property and equipment, net 7,974 2,680
Other assets 106,465 43,308
Total assets $262,019 $165,152
Liabilities and Stockholders' Equity
Accounts payable $3,837 $5,201
Accrued expenses 7,104 4,228
Deferred revenue 245 2,074
Income taxes payable 82 --
Current portion of long-term
obligations 22 55
Total current liabilities 11,290 11,558
Long-term obligations -- 21
Total liabilities 11,290 11,579
Common stock 270,713 171,147
Deferred stock compensation (26,443) (21,937)
Retained earnings 6,459 4,363
Total stockholders' equity 250,729 153,573
Total Liabilities and
Stockholders' Equity $262,019 $165,152
SOURCE: Ditech Communications Corporation
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