anyone still following this one?
ncial Results For The Fourth
Quarter and Year Ended December 31, 1997
Tuesday, January 20, 1998 08:31 AM
> FRAMINGHAM, Mass.--Natural MicroSystems(TM), the technology leader in Open
Telecommunications(TM), today announced record revenues for the fourth quarter of 1997 of
$21.4 million compared to $15.4 million for the corresponding quarter in 1996, an increase of 39
percent.
Net income for the quarter was $2.9 million or $0.26 per share, excluding a one-time charge in the
fourth quarter of 1997 associated with the acquisition of ViaDSP, Inc., compared to $2.2 million or
$0.20 per share for the corresponding quarter of 1996. Including the one-time charge, results for
the fourth quarter of 1997 were a net loss of ($2.7) million or ($0.25) per share.
Revenues for the year ended December 31, 1997 were $75.4 million compared to $51.5 million for
the year 1996, an increase of 46 percent. Net income for the full year was $9.4 million or $0.84 per
share compared to $6.1 million or $0.63 per share for 1996, excluding one-time charges in the
fourth quarter of 1997 associated with the acquisition of ViaDSP, Inc., and in the second quarter of
1996 associated with the acquisition of TEKnique, Inc. Including these one-time charges net income
for 1997 was $3.8 million or $0.34 per share and net income for 1996 was $1.6 million or $0.17
per share.
"1997 was another outstanding and strategically important year for Natural MicroSystems," said
Bob Schechter, chairman and CEO of Natural MicroSystems. "We had strong revenue and income
growth, as well as impressive sequential growth in design wins in both our traditional business and in
IP Telephony. We have made important progress in developing our people, products and
infrastructure to exploit the very exciting opportunities we see ahead. Perhaps most significantly, we
established the leadership position in an entirely new area, IP Telephony, which has become the
fastest growing market segment in telecommunications.
"We successfully established our platform, Fusion(TM), as the preferred development platform for
high performance, high capacity IP telephony gateway solutions developers. Fusion 2.0, which will
be delivered to customers this quarter, further enhances our position by adding support for the
H.323 standard, enabling Fusion 2.0 gateways to connect to diverse clients such as Microsoft
NetMeeting, VocalTec's Iphone, and NetSpeak's WebPhone. Fusion 2.0 also adds support for
several vocoders, including g.723.1, g.729a, and VoxWare RT24.
"During the fourth quarter we concluded the acquisition of ViaDSP, Inc., a leading provider of
telecommunications software and gateway technologies. Their expertise in Digital Signal Processing
(DSP) engineering significantly enhances our technical leadership in Open Telecommunications and
complements our Fusion product line for IP Telephony."
The company launched several important additions and enhancements to its product line during
1997, including CT Access, a powerful integrated software development environment and winner of
CTI Magazine's Editor's Choice award; and the Alliance Generation Quad T1/E1, which is now in
the beta test phase. The AG Quad T1/E1 is the first product in the industry to use the PCI and
H.100 next-generation computer buses. Additionally, the company forged a strategic alliance with
Lucent Technologies Microelectronics Group for the joint development of the Ambassador series of
H.100 compliant chips, which were designed by Natural MicroSystems. The agreement assures
Natural MicroSystems and the rest of the industry a reliable source of high quality processors for
the implementation of the H.100 bus, an important new interoperability standard for Open
Telecommunications solutions.
Among the important design wins announced in 1997 were Digital Equipment Corporation and
NetSpeak's selection of Fusion, and Aspect Telecommunication's selection of the Alliance
Generation product line for the OpenMedia Module of their foundation architecture. Also during
1997 Natural MicroSystems opened new offices in the United Kingdom, Spain and Singapore and
consolidated its Massachusetts-based engineering, marketing, sales and operations resources in its
new headquarters building in Framingham.
About Natural MicroSystems
Natural MicroSystems(tm) (NASDAQ:NMSS), based in Framingham, Mass., is the technology
leader in Open Telecommunications, providing hardware and software technologies for developers
of high-value telecommunications solutions. The Company's state-of-the-art technology enables a
growing international network of OEMs, VARs, systems integrators and service providers to
reduce time to market, leverage development resources, and offer truly global communications
products. Natural MicroSystems products are installed in more than 40 countries worldwide.
Founded in 1983, Natural MicroSystems developed Watson(R), the first product to utilize DSP
technology in PC-based telephony products, and has been a leader in the creation of MVIP and
H.100, the industry standards for interoperability in PC-based telephony products. More
information on the company is available at nmss.com.
Statements expressing the beliefs and expectations of management regarding future performance are
forward-looking and involve risks and uncertainties, including, but not limited to, quarterly
fluctuations in results and other risks. These risks are detailed from time to time in the Company's
filings with the securities and Exchange Commission, including the Company's form 10-K for the
year ended December 31, 1996 and its Form 10-Qs filed since December 31, 1995. Actual results
may differ materially from management expectations.
NATURAL MICROSYSTEMS CORPORATION
Consolidated Statements of Operations
(In $000 except per share data)
(unaudited)
For the Three Months Ended For the Year Ended
December 31, December 31,
1996 1997 1996 1997
--------- --------- --------- ---------
Revenues $ 15,398 $ 21,361 $ 51,464 $ 75,363
Cost of revenues 5,136 6,435 18,394 25,298
--------- --------- --------- ---------
Gross profit 10,262 14,926 33,070 50,065
Operating expenses:
Selling, general and
administrative 4,666 6,684 15,251 22,294
Research and development 3,098 4,092 10,328 14,851
Purchased in-process
research and development - 5,601 4,426 5,601
--------- --------- --------- ---------
--------- --------- --------- ---------
Total operating expenses 7,764 16,377 30,005 42,746
--------- --------- --------- ---------
Operating income (loss) 2,498 (1,451) 3,065 7,319
Interest and other, net 372 263 1,208 1,198
--------- --------- --------- ---------
Other income (expense), net 372 263 1,208 1,198
--------- --------- --------- ---------
Income (loss) before income
taxes 2,870 (1,188) 4,273 8,517
--------- --------- --------- ---------
Income tax expense 702 1,487 2,643 4,758
========= ========= ========= =========
Net income (loss) $ 2,168 $ (2,675) $ 1,630 $ 3,759
========= ========= ========= =========
Diluted net income (loss)
per Common Share $ 0.20 $ (0.25) $ 0.17 $ 0.34
========= ========= ========= =========
Weighted average shares
outstanding 10,763 10,667 9,675 11,179
========= ========= ========= =========
Diluted net income excluding
non-recurring charges (1) $ 0.20 $ 0.26 $ 0.63 $ 0.84
========= ========= ========= =========
Weighted average shares
outstanding 10,763 11,444 9,675 11,179
========= ========= ========= =========
(1) Results shown exclude in-process research and development charges
of $4,426 in Q2 1996 and $5,601 in Q4 1997 relating to the
acquisition of TEKnique, Inc. and ViaDSP, Inc., respectively.
NATURAL MICROSYSTEMS CORPORATION
Condensed Consolidated Balance Sheet
(In $000)
Unaudited
December 31, December 31,
ASSETS 1996 1997
-------- --------
Current assets:
Cash and marketable securities $33,345 $33,310
Accounts receivable, net 13,403 19,519
Inventories 5,419 8,628
Prepaid expenses and other current assets 1,793 3,120
-------- --------
Total current assets 53,960 64,577
Property and equipment, net 3,908 9,109
Other long-term assets 4,139 5,136
Excess of purchase price over net assets acquired 655 2,871
======== ========
$62,662 $81,693
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 9,433 13,308
Long-term obligations, less current portion 347 243
Stockholders' equity 52,882 68,142
======== ======== |
