April 16, 1998
ACT Networks Announces Third Quarter Results
CAMARILLO, Calif.--(BUSINESS WIRE)--April 16, 1998--ACT Networks,
Inc.(NASDAQ:ANET) today announced results for the third quarter and nine months
ended March 31, 1998.
Third quarter revenues were $13,007,000 as compared to $13,652,000 in the comparable
quarter for the prior year. Net income for the third quarter was $3,148,000, or $0.34 per
share, as compared to a net loss of $1,036,000, or $ 0.11 per share, in the same period
last year. Net income for the three months ended March 31, 1998 include a $0.51 per
share gain from the sale of the Company's investment in NetSpeak Corp. Results for the
three months ended March 31, 1997 include in-process research and development charges
of $2,715,000 related to the Company's acquisition of the DynaStar(TM) family of
products.
For the nine months ended March 31, 1998, revenues grew approximately 16% to
$41,338,000 from $35,725,000 for the comparable period last year. For the nine month
period, net loss, including in-process research and development charges of $6,750,000,
was $6,282,000, or $0.68 per share versus a net gain of $1,369,000, or $0.14 per share in
the year-ago period. Excluding in-process research and development charges, net income
for the nine months period was $468,000 or $0.05 per share versus $4,785,000, or $0.48
per share last year.
"Sales to the Asia Pacific region decreased by almost $2.3 million in the third quarter from
the immediately preceding second quarter," stated Martin Shum, Chairman and Chief
Executive Officer. "While we had anticipated softness in the market, we were disappointed
that a number of orders from the United States and Latin America slipped from the third
quarter into the fourth. Lower than anticipated revenues for the period had a negative
impact on our operating results and we intend to adjust our expense levels with the
expectation of continued uncertainty in Asia."
Shum continued, "We are very pleased with our sales momentum early in the fourth quarter
and have won two significant network bids in Latin America and the U.S. Additionally, we
have received orders for over $1.6 million in combined sales from two customers: a U.S.
based satellite system integrator and the Department of Telecommunications in India. In
addition to these early orders, we are also pleased with the initial reception to our newly
introduced family of carrier-class voice over IP gateways which we believe offer superior
capacity, scalability and price performance."
This press release may contain forward-looking statements regarding future events and
future financial performance of the Company. These statements are only predictions and
actual events or results may differ materially as a result of a number of factors including,
without limitation, the factors discussed in the Company's last Reports on Forms 10-K and
10-Q under "Risk Factors" and the risks associated with the possibility that the market for
Frame Relay products will not continue to develop or that the Company's products and
capabilities will not address emerging market needs; the effect of increased competition;
changing technologies, product obsolescence and new product developments; the loss of
significant customers; the Company's ability to effectively integrate acquisitions; the
Company's ability to manage its growth; international sales, tariff and regulatory matters;
reliance on third party suppliers and on resellers for distributing its products, and the
Company's ability to retain key personnel and to adequately protect its proprietary
technology.
ACT Networks, Inc. develops, manufactures, and markets Frame Relay wide-area
network access products which support a broad range of voice, data and integrated
network applications. The Company is focused on three strategic markets: enterprise
networks (ACTnet)(TM) and NetPerformer(TM)), satellite networks (SkyFrame(TM)) and
carrier networks (FrameXchange(TM) and DynaStar(TM)). End users and service
providers worldwide use the Company's products to build cost-effective, bandwidth
efficient, easy-to-manage wide area networks (WANs). The Company's products
incorporate advanced voice and data compression algorithms, switching capabilities and
proprietary integration technologies.
ACT Networks Inc.
Income Statement Highlights
(amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
March 31 March 31
1998 1997 1998 1997
---- ---- ---- ----
Net Sales $ 13,007 $ 13,652 $ 41,338 $ 35,725
Gross Profit 7,287 7,836 23,181 20,245
Research & Development 3,996 2,223 11,669 5,537
SG&A 5,480 4,149 17,063 10,854
In-process Research &
Development 2,715 6,750 3,416
Operating (Loss) Income (2,189) (1,251) (12,301) 438
Gain on Investment 4704 4704
Net Interest Income 427 773 1,522 2,453
-------- -------- -------- --------
Net Income Before Taxes 2,942 (478) (6,075) 2,891
Provision for Income Taxes (206) 558 207 1,522
-------- -------- -------- --------
Net Income (Loss) 3,148 (1,036) (6,282) 1,369
======== ======== ======== ========
Net Income (Loss)
per Share $ 0.34 ($ 0.11) ($ 0.68) $ 0.15
Weighted Average Shares
Outstanding 9,139 9,194 9,172 9,159
Net Income (Loss)
per Share - Diluted $ 0.33 ($ 0.11) ($ 0.68) $ 0.14
Weighted Average
Shares - Diluted 9,511 9,194 9,172 10,132
BALANCE SHEET SUMMARY
March 31, 1998 June 30, 1997
-------------- -------------
Cash and Cash Equivalents $40,016 $33,405
Short Term Investments 6,012 28,135
Accounts Receivable 20,010 14,792
Inventory 13,340 12,263
Other Current Assets 1,405 545
Net Fixed Assets 5,389 4,759
Goodwill and Other
Intangible Assets, Net 5,085 4,676
Other Assets 120 2,121
--------------- --------------
Total Assets 91,377 100,696
=============== ==============
Current Liabilities 5,926 7,158
Other Liabilities
Stockholders' Equity 85,451 93,538
--------------- --------------
Total Liabilities &
Stockholders' Equity 91,377 100,696
=============== ==============
CONTACTS: Morgen-Walke Associates
Melvin L. Flowers, 805/388-2474
Chris Danne, Jeannine Lewan, Doug Sherk
415/296-7383
Sandra Badurina /Deborah Szajngarten
212/850-5600 or 212/850-5698 |
