ONIS ( $21 - $23) EPS -$1.16....Net loss improves 5c vs 7c
Revenue Increases 51% Over First Quarter; Total Customers Increase to 24 Net Loss of $(0.05) Per Share Improves from $(0.07) Per Share in First Quarter
SAN JOSE, Calif.--(BUSINESS WIRE)--July 23, 2001-- ONI Systems Corp. (Nasdaq:ONIS - news), a leading provider of optical telecommunications systems for the metropolitan and regional markets, today reported financial results for the second quarter and six months ended June 30, 2001.
Net revenues for the second quarter increased 51% to $68.2 million compared with revenues of $45.1 million in the first quarter of 2001. Pro forma net loss, excluding non-cash charges related to the amortization of deferred stock compensation and goodwill, for the quarter was $(6.7) million, or $(0.05) per diluted share.
Revenues of $68.2 million compare with $9.5 million in the second quarter of 2000. Gross margin as a percentage of revenue for the quarter was 38.9% compared with 27.6% in the second quarter of 2000. The pro forma net loss of $(0.05) per diluted share for the quarter compares with $(0.18) per diluted share in the second quarter of 2000.
``ONI's strong product acceptance continued as we added three new major customers in the second quarter -- including Dynegy Global Communications, Korea Telecom and SDN Communications -- all with plans for multi-city deployments. ONI's ONLINE products will be deployed by Dynegy in 18 cities. In addition, the ONLINE11000 gained significant customer traction as SDN selected it for deployment in more than 30 cities and Korea Telecom selected it to connect multiple cities throughout Korea,'' said Hugh Martin, chairman, president and chief executive officer, ONI Systems. ``Our substantial revenue growth this quarter was also fueled by repeat revenue from 19 of the 21 customers we had at the end of Q1.''
Also in the quarter, the ONLINE2500 and the ONWAVE(TM) OC-48 SONET Add/Drop Multiplexer -- which were specifically designed to provide lower cost solutions with reduced space and power requirements for our customers -- became generally available for sale. Both of these products are expected to begin volume deliveries in Q3 2001.
Reported net loss in the second quarter of 2001 was $(18.6) million, or $(0.14) per diluted share, versus a reported net loss of $(39.4) million, or $(0.40) per diluted share, in the second quarter of 2000.
For the six months ended June 30, 2001, revenues increased to $113.3 million compared with $13.1 million for the same period in the prior year. Pro forma net loss, excluding non-cash charges related to amortization of deferred stock compensation, goodwill and in-process research and development, for the period was $(15.9) million, or $(0.12) per diluted share, compared with a loss of $(35.1) million, or $(0.33) per diluted share, for the prior year. Reported net loss for the six months ended June 30, 2001 was $(49.7) million, or $(0.38) per diluted share, versus a net loss of $(73.5) million, or $(0.73) per diluted share, for the same period a year ago.
The company's cash, cash equivalents and marketable securities balance at June 30, 2001, was $739 million.
Business Outlook
``ONI continues to be well positioned with next generation products that are meeting the demands of metropolitan optical networking -- a market that is widely predicted to see continued growth in spite of the broader industry downturn. While the market environment remains price competitive, demand for our products is strong as carriers and service providers continue to purchase and deploy metro and regional equipment in order to enhance their revenues,'' said Martin. ``We are well ahead of our 2001 targets for new customer acquisitions with many of our customers planning multiple city deployments. We now expect to have 32 to 34 customers by the end of 2001, up from our prior guidance of 28 to 30. As a result, in the near term, we expect to see increased revenue dominated by initial deployments with lower channel counts and lower initial gross margins as a percentage of revenue. However, we are establishing an excellent customer base from which to continue to grow our business and provide more value added products well into the future.''
The company is projecting revenues of $75 to $80 million in the third quarter -- up from the prior estimate of $60 to $70 million. Fourth quarter revenue is expected to be between $85 and $90 million, resulting in total year revenue of $275 to $285 million -- an increase from the prior estimate of $245 to $255 million. Gross margin as a percentage of revenues is forecasted to range between 38% and 40% over this period. The company continues to expect to achieve break-even earnings per share, excluding non-cash charges related to amortization of stock compensation and goodwill, in the fourth quarter of 2001.
Other Highlights in the Quarter
Expanded relationship with Qwest Communications International Inc., as Qwest enhanced its existing ONI ONLINE(TM) transport platform to deliver OC-192 (10 gigabit per second) services to its metro customers. With the enhancement, Qwest can now transport as much as 330 Gbps per fiber, as well as simultaneously offer OC-48 (2.5 Gbps) and OC-192 wavelength services on the same platform.
Entered the optical edge market with the ONLINE2500 Optical Edge Service Platform, extending high bandwidth services from metro networks directly to end-users at the network edge. The ONLINE2500 Optical Edge Service Platform became generally available in June and was showcased in a live demonstration that highlighted its interoperability with other vendors at SUPERCOMM in Atlanta, Georgia on June 5-7, 2001. ONI's comprehensive next generation product portfolio can now deliver optical services across large regional (inter-city) rings, metro core rings and to the edge of the enterprise to provide a comprehensive, end-to-end solution for a broad range of services.
Introduced two new ONWAVE products -- the ONWAVE ESCON Multiplexer and the ONWAVE OC-192/STM-64 Multiplexer -- that will enable service providers to further increase system capacity and wavelength utilization while reducing operational costs. These products will reduce the need for external grooming and switching equipment, provide integrated service management, and reduce space and power requirements for telecommunications service providers.
Expanded Asia Pacific presence with a new headquarters in Singapore.
Introduced the OPTX(TM) Software Suite, release 4.0, which extends ONI's advanced A-to-Z provisioning capability to automate provisioning of services that traverse multiple sub-networks. This state of the art technology enables operators to now provision an optical service across multiple rings and through the long-haul core in a single step. Optical services, such as OC-3 through OC-192 and Gigabit Ethernet, can be delivered from a remote network operations center (NOC) in seconds, across multiple metropolitan locations, and coast-to-coast through the long-haul core with a few clicks.
About ONI Systems
ONI Systems (Nasdaq:ONIS - news) develops, markets and sells optical networking equipment specifically designed to address bandwidth and service limitations of regional and metropolitan networks. Our products allow communication service providers to rapidly build high-capacity metro networks that are flexible, scalable and able to support multiple services on a single platform. Our products include the ONLINE11000, ONLINE9000, ONLINE7000, and ONLINE2500 transport platforms; the ONWAVE(TM) OC-48 SONET/SDH Add/Drop Multiplexer, ONWAVE OC-192/STM-64 Multiplexer, ONWAVE Data Multiplexer and ONWAVE ESCON Multiplexer; and OC-192/STM-64 (10 gigabits per second) interface. The ONLINE(TM) transport platforms are complemented by our OPTX(TM) Software Suite for end-to-end wavelength and service management capabilities. The OPTX Software Suite includes the OPTX Network Designer, OPTX Management Portal, OPTX CORBA Gateway, OPTX Network Operating System (NOS) and more, as well as the OLMP(TM) optical link management protocol suite for standards-based internetworking. For additional information about ONI and its products, visit the company Web site at www.oni.com. |
