Cabletron Announces Fourth Quarter Expectations Business/Technology Editors ROCHESTER, N.H.--(BUSINESS WIRE)--March 2, 1998--Cabletron Systems today announced that, based on current information, it expects revenues for its fourth quarter of fiscal 1998 to be in the range of $305 million to $320 million which compares to $380.6 million for the fourth quarter of fiscal 1997. The Company expects a pre-tax non-recurring charge for in process R&D of $335 million (after tax of $203.6 or $1.28 per share on a fully diluted basis), related to its closing of the Digital Network Products Business in its fourth fiscal quarter results. The Company also expects a pre-tax non-recurring charge of approximately $55 million (after tax of $33.4 million or $0.21 per share on a fully diluted basis) for transaction related expenses related to the closing of the Digital Network Products Business. Additionally, the company still anticipates a pre-tax charge of approximately $30 million (after tax of !
$18.2 million or $0.12 per share on a fully diluted basis) for realignment. Due to a shortfall in sales, operating expenses related to the closing and integration of the Digital Network Business early in the quarter and the adverse margin impact of lower volume, pricing and some materials related charges, the company expects an approximate earnings per share range of breakeven to a small loss before non-recurring charges on a fully diluted basis. The Company expects to release final results for the fourth fiscal quarter on March 30, 1998. President and Chief Executive Officer Don Reed stated the Company experienced continued softness in the company's Federal Government business. In addition, the Company experienced an order shortfall in certain domestic segments at the end of the quarter, during which the Company typically realizes a large portion of its orders. Due in part to the shortfall in sales, as well as efforts to establish consistent and more stringent channel policie!
s as the Company seeks to grow its channel presence, the Company experienced a correction in channel inventory levels. Reed stated, "Despite the strength of the activities of the quarter, including the closing of our Digital acquisition and the announcement of the definitive agreement to acquire Yago Systems, there were some pitfalls in our domestic sales which we are aggressively addressing." "Even with the difficulties of the past six months, we remain energized and optimistic about the future of our industry and our company. We have taken many strides and are looking forward to the fruit of these difficult decisions," said Reed. The revenue and earnings expectations contained in this press release constitute forward looking information, and actual results could differ materially. Among the factors that could cause actual results to differ are final accounting results, competitive conditions, including new product announcements, technological changes and changes in overall d!
emand levels for computer networking products. For a more detailed discussion of the risks and uncertainties related to the Company's business, please refer to the Company's Annual Report on Form 10-K for fiscal 1997. About Cabletron Systems, Inc. Cabletron Systems is a recognized leader in providing high-performance Intranet and Internet solutions, including LAN and WAN switches, remote access products and advanced network and systems management software. Under its Synthesis product framework, Cabletron markets products to businesses and customers throughout the world for linking and managing enterprise-wide networks. With corporate headquarters in Rochester, NH, Cabletron employs 7,000 people worldwide. Cabletron's common stock is traded over the New York Stock Exchange under the symbol CS. -0- Cabletron has a conference call scheduled for 4:45 pm ET. Please call 888/790-1947. The passcode is 8441051. The instant replay No. 4022203840, will run through March 9, 1998.
Business Wire - March 02, 1998 16:38
%CABLETRON CS %MASSACHUSETTS %NEW-HAMPSHIRE %COMED %COMPUTERS %ELECTRONICS %EARNINGS V%BW P%BW
CONTACT: Cabletron Systems
Jim Caldwell, 603/337-4225
jcaldwell@ctron.com
or
Darren Orzechowski, 603/337-1282
darreno@ctron.com
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