Elastic Networks Inc. Reports 2001 Second Quarter Results
ALPHARETTA, Ga., Jul 26, 2001 (BUSINESS WIRE) -- Elastic Networks Inc. (NASDAQ:
ELAS) today reported results for the second quarter ended June 30, 2001.
In the second quarter, the Company reported revenues of $8.0 million compared to
revenues of $5.6 million for the first quarter ended March 31, 2001. Revenues
for the second quarter ended June 30, 2000 were $8.5 million. The pro forma net
loss for the quarter ended June 30, 2001 was $(6.7) million or $(0.21) per
share, excluding non-cash stock based compensation expenses totaling $1.2
million, compared with a pro forma net loss for the quarter ended June 30, 2000
of $(6.8) million or $(0.41) per share, excluding non-cash stock based
compensation expenses and accretion of series A preferred stock totaling $0.8
million.
"We made good progress in the second quarter by growing our revenues 42% over
first quarter and realigning our expense structure to position our business for
profitability," said Guy Gill, Chief Executive Officer and President of Elastic
Networks. "We achieved a number of significant accomplishments during the second
quarter:
-- We continued to ramp our EtherLoop(TM) systems with Verizon
Avenue supporting their national broadband service deployment;
-- We announced our new EtherLoop2(TM) technology on June 5, 2001,
which we expect will achieve speeds of up to 100 megabits per
second;
-- We implemented a strategic relationship with Hitachi Telecom
(USA), Inc. to combine best-of-breed products to simplify
voice and broadband-based Internet access for the hospitality
market.
These initiatives demonstrate and support Elastic Networks' commitment to our
long-term strategy of diversifying and growing our customer base and continued
positioning as a market leader in intelligent, first-mile Ethernet access
technologies and products."
Elastic Networks will host a conference call later today at 5:00 p.m. EDT to
discuss second quarter 2001 operating results and the outlook for 2001. For
listen-only access to our conference call within the U.S., please dial (800)
313-8070 by 4:45 p.m. EDT on July 26 and ask for the Elastic Networks Earnings
Conference 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 14 days.
About Elastic Networks Inc.
Elastic Networks is a market leader in intelligent, first-mile Ethernet access
technologies and products that enable service providers to rapidly deploy
high-speed, 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, Georgia and Hong Kong, China.
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 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 Six Months
Ended June 30 Ended June 30
2001 2000 2001 2000
-------- -------- -------- --------
Net revenues $ 8,000 $ 8,504 $13,643 $14,693
Cost of revenues 6,807 8,075 12,337 14,131
-------- -------- -------- --------
Gross profit (1) 1,193 429 1,306 562
Operating expenses: (1)
Sales and marketing 3,010 3,596 6,949 6,137
Research and development 2,953 2,678 6,445 4,757
General and administrative 2,460 971 4,595 2,163
-------- -------- -------- --------
Total operating expenses 8,423 7,245 17,989 13,057
-------- -------- -------- --------
Operating loss (7,230) (6,816) (16,683)(12,495)
Other income (expense), net 541 (25) 1,440 53
-------- -------- -------- --------
Pro forma net loss $(6,689) $(6,841) $(15,243)$(12,442)
======== ======== ======== =======
Pro forma net loss per share -
diluted $ (0.21) $ (0.41) $ (0.48) $(0.75)
======== ======== ======== =======
Weighted Shares used in computing
pro forma basic and diluted
net loss per share 31,467 16,675 31,429 16,675
======== ======== ======= =======
The above Pro Forma Condensed Statements of Operations is not a
presentation in accordance with accounting principles generally
accepted in the United States of America as it excludes the effects of
the following:
(1) Excludes $14.0 million of restructuring charges, excess
inventory provisions, and additional accruals for
uncollectible accounts for the six months ended June 30, 2001.
Excludes $1.2 million, $0.7 million, $2.3 million, and $0.8
million of non-cash stock based compensation expenses for the
three months ended June 30, 2001 and 2000 and six months ended
June 30, 2001 and 2000, respectively. Excludes accretion of
series A preferred stock of $0.1 million and $0.3 million for
the three months and six months ended June 30, 2000,
respectively.
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 accounting principles
generally accepted in the United States of America.
ELASTIC NETWORKS INC.
Condensed Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Six Months
Ended June 30 Ended June 30
2001 2000 2001 2000
--------- -------- -------- -------
Net revenues $ 8,000 $ 8,504 $13,643 $14,693
Cost of revenues 6,807 8,075 12,337 14,131
Charges related to excess
inventory on hand and on
order and restructuring
charges - - 11,853 -
--------- -------- -------- -------
Gross profit (loss) (1) 1,193 429 (10,547) 562
Operating expenses: (1)
Sales and marketing 3,032 3,668 7,031 6,241
Research and development 2,978 3,324 6,528 5,429
General and administrative 3,573 999 8,903 2,204
--------- -------- -------- -------
Total operating expenses 9,583 7,991 22,462 13,874
--------- -------- -------- -------
Operating loss (8,390) (7,562) (33,009) (13,312)
--------- -------- -------- -------
Other income (expense), net 541 (25) 1,440 53
--------- -------- -------- -------
Net loss (7,849) (7,587) (31,569) (13,259)
Accretion of Series A preferred
stock - (133) - (266)
--------- -------- -------- -------
Net loss attributed to common
stockholders $(7,849) $(7,720)$(31,569)$(13,525)
========= ======= ========= =======
Basic and diluted net loss per
common share $ (0.25) $(0.46)$ (1.00)$ (0.81)
========= ======= ========= =======
Weighted average shares used in
computing basic and diluted net
loss per common share 31,467 16,675 31,429 16,675
========= ======= ========= =======
(1) Includes $14.0 million of restructuring charges, excess
inventory provisions, and additional accruals for
uncollectible accounts for the six months ended June 30, 2001.
Includes $1.2 million, $0.7 million, $2.3 million, and $0.8
million of non-cash stock based compensation expenses for the
three months ended June 30, 2001 and 2000 and six months ended
June 30, 2001 and 2000, respectively. Includes accretion of
series A preferred stock of $0.1 million and $0.3 million for
the three months and six months ended June 30, 2000,
respectively.
ELASTIC NETWORKS INC.
Condensed Balance Sheets
(in thousands)
(unaudited)
June 30, December 31,
2001 2000
----------- -----------
Assets
Current assets:
Cash, cash equivalents and
short-term investments $ 41,338 $ 68,591
Accounts receivable, net of
allowance for doubtful
accounts of $209 and $90 5,830 8,068
Inventories 13,136 6,467
Note receivable - 2,951
Other current assets 2,140 1,799
----------- -----------
Total current assets 62,444 87,876
Property and equipment, net 4,410 3,375
Investment - long term 102 102
----------- -----------
Total assets $ 66,956 $ 91,353
=========== ===========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $ 13,086 $ 10,891
Accrued liabilities 5,317 2,341
Deferred revenues 774 926
Capital lease obligations 227 216
----------- -----------
Total current liabilities 19,404 14,374
Deferred revenues, long-term 337 712
Capital lease obligations,
long-term 192 305
Stockholders' equity 47,023 75,962
----------- -----------
Total liabilities and
stockholders' equity $ 66,956 $ 91,353
=========== ===========
CONTACT: Elastic Networks Inc.
Darrell Borne, 678/297-3100
irinfo@elastic.com
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-0-
KEYWORD: GEORGIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS
INTERNET
SOFTWARE
TELECOMMUNICATIONS
EARNINGS
STOCK SYMBOLS: [(elas)] |
