Ascend Communications Reports First Quarter 1998 Financial Results
Business Wire via Dow Jones
ALAMEDA, Calif.--(BUSINESS WIRE)--April 9, 1998--Ascend Communications, Inc.
(NASDAQ:ASND) today reported financial results for its first quarter ended March
31, 1998. First quarter net sales were $305.1 million and net income was $52.4
million ($0.26 per share on a diluted basis). Compared to the fourth quarter of
1997, these results represent sequential quarterly growth in net sales and net
income of 4.3% and 10.1%, respectively.
Commenting on the Company's first quarter performance, Mory Ejabat, president
and chief executive officer of Ascend, said: "We are pleased with Ascend's first
quarter financial results, which showed sequential growth in both net sales and
net income. North America, in particular, showed strength driven by strong
demand for access ports. We also achieved key customer wins, with our most
recent win being a nationwide frame/ATM backbone network for GTE, a customer
with which we have had a long-standing relationship. Strong financial results
and key customer wins, combined with continued new-product introductions,
including the MAX 6000 and the Voice over IP products, made the first quarter a
success."
Ejabat continued, "Reviewing our business units, Access Switching showed
strong growth driven by demand in North America and the strength of the MAX TNT
as the access platform of choice among the largest Network Service Providers.
We also saw a pickup in demand for our DSL products, with our CLEC customers
being the early adopters of this technology. Our strength with the large
Network Service Providers has allowed us to maintain market share leadership in
access concentration over the last five quarters, as measured by the Dell'Oro
Group."
Commenting on Ascend's Core Systems business, Ejabat said: "We continue to be
pleased with our momentum selling backbone infrastructure to the large Network
Service Providers worldwide. Sales in both our European and Asia-Pacific markets
increased quarter-over-quarter. In addition, we saw frame relay sales increase
as more of our customers deploy backbone networks that utilize a mix of our
frame relay and ATM switching platforms."
Commenting on the outlook for the remainder of 1998, Ejabat said: "We continue
to see strong demand for capacity in the network backbone, with ATM clearly
emerging as the network architecture of choice. We also expect that growth from
the consumer segment, driven by both new subscribers and increasing connect
times, will drive demand for access ports. We believe that the market
opportunities are significant, that Ascend is well positioned within those
markets, and that our strategy is sound."
This press release contains certain forward-looking statements that are based
on current expectations and involve risks and uncertainties.
Actual results could differ materially from these expectations as a result of
factors, including the demand for, revenue from and acceptance of the Company's
products, the Company's success in developing, introducing or shipping new
products, the timing and acceptance of new product introductions, competition,
the mix of distribution channels employed, the Company's dependence on single or
limited source suppliers for certain components used in its products, risks
inherent in international sales, seasonality and general economic conditions.
In addition, revenue and earnings in the data networking equipment industry
are subject to fluctuation and the growth rates recently experienced by the
Company do not necessarily represent future operating results. Investors should
not use any one quarter's results as a benchmark for future growth.
For a more detailed description of the risk factors associated with the
Company and the data networking industry, please refer to the Company's Form
10-K, 10-Q and other filings made periodically with the Securities and Exchange
Commission.
About Ascend Communications
Ascend Communications, Inc. develops, manufactures, and sells wide area
networking solutions for telecommunications carriers, Internet service
providers, and corporate customers worldwide. For more information about Ascend
and its products, please visit the Ascend web site at ascend.com, or
e-mail info@ascend.com.
Ascend Communications, Inc.
Condensed Consolidated Statements of Operations
Unaudited
(In Thousands, Except Per Share Data)
Quarter Ended March 31,
1998 1997
Net Sales $ 305,114 $ 292,740
Cost of Sales 109,810 102,387
--------- ---------
Gross Profit 195,304 190,353
Operating Expenses:
Research and Development 40,988 34,668
Sales and Marketing 67,339 53,241
General and Administrative 10,044 9,089
Purchased Research and Development -- 231,100
--------- ---------
Total Operating Expenses 118,371 328,098
Operating Income (Loss) 76,933 (137,745)
Interest Income, Net 4,964 5,276
--------- ---------
Income (Loss) Before Income Taxes 81,897 (132,469)
Provision for Income Taxes 29,525 30,772
--------- ---------
Net Income (Loss) $ 52,372 ($163,241)
========= =========
Net Income (Loss) Per Share - Basic $ 0.27 ($ 0.88)
========= =========
Net Income (Loss) Per Share - Diluted $ 0.26 ($ 0.88)
========= =========
Number of Shares
Used in Per Share Calculation - Basic 192,849 185,812
========= =========
Number of Shares Used in
Per Share Calculation - Diluted 203,245 185,812
========= =========
========= =========
Ascend Communications, Inc.
Condensed Consolidated Balance Sheets
Unaudited
(In Thousands)
March 31, Dec. 31,
1998 1997
ASSETS
Cash, Cash Equivalents
and Short-Term Investments $ 605,117 $ 475,427
Accounts Receivable, Net 243,002 234,183
Inventories 102,936 99,637
Other Current Assets 123,619 105,340
---------- ----------
Total Current Assets 1,074,674 914,587
Investments 86,328 101,212
Furniture, Fixtures and Equipment, Net 126,700 114,351
Other Assets 18,810 7,744
========== ==========
Total Assets $1,306,512 $1,137,894
========== ==========
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 251,669 $ 168,638
---------- ----------
Total Current Liabilities 251,669 168,638
Stockholders' Equity:
Common Stock 193 191
Additional Paid In Capital 911,668 878,455
Retained Earnings 142,982 90,610
---------- ----------
Total Stockholders' Equity 1,054,843 969,256
---------- ----------
Total Liabilities and Stockholders' Equity $1,306,512 $1,137,894
========== ==========
========== ==========
Ascend is headquartered at One Ascend Plaza
1701 Harbor Bay Parkway
Alameda, California 94502
Phone: 800/ASCEND4
Fax: 510/814-2300
E-mail: info@ascend.com |
