Shiva Corporation Reports Second Quarter Fy96 Results
BEDFORD, Mass., July 18 /PRNewswire/ -- Shiva Corporation (Nasdaq: SHVA) today
reported financial results for its second quarter ended June 29, 1996. Revenues for the quarter
were $51.5 million, 95% greater than revenues of $26.4 million in the same quarter of the prior
year. Revenues from sales of remote access products totaled $43.6 million, 145% greater than
remote access product revenues of $17.8 million in the second quarter of last year. Shiva's results
have been restated retroactively to combine the historical results of AirSoft, Inc. which was
acquired on June 17, 1996, and the historical results of Spider Systems, Limited which was
acquired on August 22, 1995. Both acquisitions were accounted for as poolings of interests.
Pro forma net income for the quarter, which excludes a previously announced charge of $2.0
million for expenses related to the acquisition of AirSoft, was $7.0 million or $0.22 per share. Pro
forma net income before the charge increased 616% over net income of $1.0 million, or $0.04 per
share, in the second quarter of 1995. Net income including merger expenses was $5.0 million, or
$0.16 per share.
For the six months ended June 29, 1996, revenues totaled $94.8 million, an increase of 82% over
revenues of $52.1 million for the first six months of 1995. Remote access revenues for the same
period were $79.0 million, 136% greater than $33.5 million of remote access revenues in the first
two quarters of 1995. Pro forma net income for the first six months was $11.3 million, or $0.36
per share, before merger expenses, 380% greater than net income of $2.4 million, or $0.09 per
share, for the same period last year. Including merger expenses, net income for the six months
ended June 29, 1996 was $9.3 million, or $0.30 per share.
"During this second quarter, Shiva continued to deliver growth in revenues and earnings while
launching many important new business initiatives that are key to our remote networking leadership
position", said Frank Ingari, President, Chairman and CEO. "This quarter Shiva delivered on its
strategy of servicing the three corners that anchor the remote networking market: the
telecommunications carrier and Internet service provider (ISP) segment, the large enterprise
segment, and the client software and hardware segment."
Ingari continued, "The newest addition to our flagship LanRover(R) product family, the LanRover
Access Switch(TM), began shipping this quarter and has already been named Best Remote
Access Product by VAR World magazine. This high-end product is designed to meet the high-
volume analog and/or digital connection requirements of telcos and large enterprises. During the
quarter, we announced the acquisition of AirSoft Inc., the leading developer of performance
enhancement technology for remote networking. The AirSoft technology will allow us to enhance
Shiva's leading client offering. We also delivered a rich suite of new products for the remote
networking market. We announced the Shiva AccessPort(TM), an ISDN router targeted to the
small, home or branch office user and the first in a family of Shiva client routers. The second
version of the ShivaPort(TM) communications server, designed to deliver high-performance,
low-cost Internet connections to ISPs and corporations, was also announced in the second
quarter. We expanded our operations to address remote networking markets worldwide, opening
offices in Singapore, Australia, South Africa and Sweden in the second quarter."
Commenting on the results of the quarter, Ingari said, "The LanRover family of products continued
to grow, and we are particularly pleased with the early success of the LanRover Access Switch
during its first quarter of volume shipments. We are excited about the demand being generated
through our OEM channels for the LanRover Access Switch by both Nortel and IBM, as well as
its acceptance in the corporate and ISP markets through our traditional reseller channels. Early
customers include American Express TRS, Fidelity Investments, NASDAQ, AT&T Transquest,
Turner Broadcasting and Deloitte & Touche. The premium value added reseller channel also grew
and is enthusiastic about the recent additions to Shiva's product line, including the LanRover
Access Switch and the Shiva AccessPort. We saw the strongest growth geographically in the
U.S., principally as a result of OEM sales of the LanRover Access Switch."
Reviewing the events of the quarter, on June 17, 1996 Shiva acquired AirSoft, Inc. of Cupertino,
California for approximately 763,900 shares of Shiva common stock. AirSoft is the leading
developer of performance enhancement software products for remote networking. AirSoft's
Powerburst product increases application response time by 200 to 400 percent for users
accessing remote LAN-based files over analog, ISDN or wireless connections. Powerburst's
client-agent design and patent- pending caching algorithms eliminate redundant network traffic,
minimizing delays in accessing LAN-based applications. Product development efforts include
applying AirSoft's technology to Internet protocols thereby minimizing performance issues such as
latency and low bandwidth. Shiva will integrate AirSoft's agent technology into ShivOS, the
operating software for the LanRover product family, and AirSoft's client software into the Shiva
client, delivering increased ease-of-use and enhanced performance to the end user.
Shiva products continue to win industry awards worldwide, bringing the total number of product
awards year to date to ten. In May, the LanRover/PLUS won the LAN Times 1996 Readers'
Choice Award for the second year in a row. The Shiva LanRover/PLUS 4.0 with integrated
ISDN was named Analyst's Choice by PC Week earlier this month. Shiva products were hailed
by several industry experts at the Networks '96 trade show in the United Kingdom. Shiva's
LanRover Access Switch earned the Networking Industry award for Best Remote Access
Product for 1996 and the LanRover/PLUS and ShivaIntegrator(TM) 200 each earned Network
Product of the Year awards from Var World magazine.
This press release may contain forward-looking statements that involve a number of risks and
uncertainties. Among the important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements are delays in product development,
competitive pressures, general economic conditions and the risk factors detailed in the Shiva
Corporation's periodic reports and registration statements filed with the Securities and Exchange
Commission.
Founded in 1985, Shiva Corporation is a global, full-line provider of remote access solutions,
systems, and services. Its products enable users and user sites at enterprises of all sizes to connect
with corporate information resources, on-line services and the Internet. Shiva offers a full range of
award-winning, analog and digital remote access and communications servers. With partnerships
that include Hewlett-Packard, IBM, Microsoft and Nortel, Shiva hardware and software are
marketed by many of the world's leading computer and communications equipment manufacturers
and telecommunications companies. The Company is based in Bedford, Mass., with international
offices and a corporate R&D and manufacturing center in Edinburgh, U.K.
NOTE: All Shiva news releases are available via the Shiva Corp. Home Page at
shiva.com or via CompuServe (GO SHIVA). The electronic services provide an easy
way to find information about all Shiva products and services. For additional information, Shiva
can be accessed electronically at sales @ shiva.com.
Shiva, Shiva with design (the Company logo), LanRover, NetModem, and NetModem/E are
registered trademarks of Shiva Corporation. Shiva PPP, Tariff Management, isdn with design,
WebRover, ShivaPort, ShivaIntegrator and LanRover Access Switch are trademarks of Shiva
Corporation. All other trademarks belong to their respective companies.
Shiva Corporation
Condensed Consolidated Statement of Operations
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
(Q2 '96) (Q2 '95)
Revenues $51,485 $26,376 $94,794 $52,113
Cost of revenues 21,397 11,180 38,782 22,257
Gross profit 30,088 15,196 56,012 29,856
Operating expenses:
Research and
development 5,462 3,537 10,656 6,356
Selling, general and
administrative 16,801 10,280 31,506 20,032
Merger expenses 1,987 --- 1,987 ---
Total operating
expenses 24,250 13,817 44,149 26,388
Income from
operations 5,838 1,379 11,863 3,468
Other income, net 807 260 2,033 518
Income before income
taxes 6,645 1,639 13,896 3,986
Income tax
provision 1,670 666 4,582 1,631
Net income $4,975 $973 $9,314 $2,355
Net income per
share $0.16 $0.04 $0.30 $0.09
Shares used in
computing net
income per share 32,067 27,030 31,296 27,045
Shiva Corporation
Condensed Consolidated Balance Sheet
(In thousands)
June 29, December 30,
1996 1995
(unaudited)
Cash, Cash Equivalents
and Short-Term Investments $100,225 $102,328
Accounts Receivable, Net 36,260 22,982
Inventories 11,852 7,846
Other Current Assets 3,738 2,351
Total Current Assets 152,075 135,507 |
