Positron Fiber Systems Announces Fourth-Quarter and Year-End Financial Results
May 21, 1998 06:58 AM
MONTREAL, May 21 /PRNewswire/ -- Positron Fiber Systems Corporation PFSCF , a leading developer of broadband access systems for telecommunications carriers, announced today financial results for the fourth quarter and fiscal year ended March 31, 1998.
Revenues for the fourth quarter were $5.4 million U.S., an increase of 47 percent, compared with the $3.7 million reported for the fourth quarter of 1997. The company reported a loss of $1.8 million, or $0.14 per share, for the fourth quarter, compared with a loss of $1.1 million, or $0.14 per share, in the fourth quarter of 1997. Revenues for the year were $17.8 million, compared with $12.5 million in fiscal 1997, which included $3.7 million in license fees. Loss for the year was $3.7 million, or $0.31 per share, for fiscal 1998, compared with a loss of $1.2 million, or $0.14 per share, in fiscal 1997.
"We achieved significant milestones during fiscal 1998, including our initial public offering in August," stated Donald Gibbs, Positron Fiber Systems' president and chief executive officer. "Throughout the year, we continued to build upon our strategic market position as the only independent supplier of synchronous optical network (SONET) and synchronous digital hierarchy (SDH) technology."
"We have experienced strong demand for our Positron OSIRIS Broadband Access Multiplexer, which provides voice and Internet solutions for telecommunications providers' access networks, from an increasing number of local carriers, resulting in a doubling of revenues year-over-year," Gibbs said.
"During the fourth quarter, we signed our first "tier one" CAP/CLEC customer in Cox Communications, one of North America's largest broadband communications companies," Gibbs continued. "This transaction, combined with our OEM agreement with ADC Telecommunications in December 1997, signals that top telecommunications and networking companies are deploying Positron's products as part of their fiber optic networks. As we previously announced, our fourth-quarter results were affected by delays in launching our Positron MIST SONET transmultiplexer product. Now that this product is in full production and is being evaluated in customer labs, we believe that PFS has generated the momentum for customer acceptance going forward."
"Our gross margin in the fourth quarter was negatively impacted by foreign exchange adjustments and a write-off of MIST inventory that did not meet our quality standards," Gibbs said. "As the Canadian dollar fluctuates, foreign exchange adjustments could continue to impact our gross margins in the future. The underlying product gross margin remains strong. This is evidenced by the fact that our product gross margin for the fiscal year was 45 percent (after adjustments) and this was an improvement over the previous year's product gross margin of 43.5 percent."
"We are encouraged by the announcement last month from Cisco Systems and CIENA Corporation to create the Optical Internetworking Forum (OIF), an industry-wide consortium. We expect this alliance to accelerate acceptance and use of fiber-optic networking and incorporate standards into our traditionally technologically fragmented industry. We believe that the OIF will generate increased interest among tier-one telecommunications and networking providers to use the type of technology that Positron provides in their networks," Gibbs concluded.
Established in 1995, Positron Fiber Systems Corporation (PFS) is a leading manufacturer of innovative telecommunications equipment for high reliability and critical services applications. PFS provides solutions for the SONET and SDH broadband access markets with its Positron OSIRIS(TM) family of broadband access multiplexers and network management systems and the Positron MIST(TM) SONET transmultiplexer. The company's headquarters are in Montreal, Quebec, Canada. For more information on PFS visit the Web site at: positronfiber.com.
In this announcement, Positron Fiber Systems makes forward-looking statements within the meaning of U.S. federal securities laws that involve a number of risks and uncertainties, including statements regarding the company's expectations, beliefs, intentions or strategies regarding the future. Among the factors that could cause actual future results to differ materially from those anticipated are general competitive pressures in the marketplace, the company's success in developing, introducing and gaining market acceptance for new products, its customer and product concentration, its dependence on suppliers, third party manufacturers and distributors, its ability to manage expansion, its dependence on the success of an evolving industry and factors such as changes in general economic conditions or conditions in the specific markets for the company's products and government regulation. Such risk factors and others are discussed in the company's registration statement on Form F-1 and related amendments as filed with the Securities and Exchange Commission.
POSITRON FIBER SYSTEMS CORPORATION
Consolidated Statements of Earnings and Deficit
For the years ended
March 31,
1998 1997
(In thousands of U.S. dollars)
Revenues
Product sales $ 17,694 $ 8,866
Technology license 120 3,650
Total revenues 17,814 12,516
Cost of revenues 9,720 5,009
Gross profit 8,094 7,507
Operating Expenses
Research and development,
net of recoveries 4,754 2,883
Selling and marketing 4,448 2,751
General and administrative 2,100 1,380
Amortization of capital assets 1,159 505
Total operating expenses 12,461 7,519
Loss from operations (4,367) (12)
Interest income 815 72
Interest expense (277) (485)
Foreign exchange gain 364 --
Net loss before income taxes (3,465) (425)
Income taxes 211 736
Net loss (3,676) (1,161)
Deficit, beginning of year (4,459) (3,298)
Deficit, end of year $ (8,135) $ (4,459)
Basic loss per share (0.31) (0.14)
POSITRON FIBER SYSTEMS CORPORATION
Consolidated Statements of Earnings and Deficit
For the three months ended
March 31,
1998 1997
(In thousands of U.S. dollars)
Revenues
Product sales $ 5,396 $ 3,532
Technology license -- 150
Total revenues 5,396 3,682
Cost of revenues 3,147 1,922
Gross profit 2,249 1,760
Operating Expenses
Research and development,
net of recoveries 1,395 987
Selling and marketing 1,546 1,202
General and administrative 896 184
Amortization of capital assets 437 148
Total operating expenses 4,274 2,521
Loss from operations (2,025) (761)
Interest income 323 47
Interest expense (40) (161)
Foreign exchange loss (64) --
Net loss before income taxes (1,806) (875)
Income taxes (2) 252
Net loss (1,804) (1,127)
Deficit, beginning of period (6,331) (3,332)
Deficit, end of period $ (8,135) $ (4,459)
Basic loss per share (0.14) (0.14)
POSITRON FIBER SYSTEMS CORPORATION
Consolidated Balance Sheet
As at March 31,
1998 1997
(In thousands of U.S. dollars)
Assets
Current
Cash and cash equivalents $ 18,270 $ 1,617
Accounts receivable 5,395 3,860
Inventory 7,274 5,220
Other current assets 2,463 5,401
Total current assets 33,402 16,098
Technology fees receivable 912 1,312
Capital assets - net
of amortization 5,029 2,705
Total Assets $ 39,343 $ 20,115
Liabilities and Shareholders' Equity
Current
Bank indebtedness $ -- $ 1,445
Accounts payable &
accrued liabilities 6,051 6,214
Current portion of
capital leases 131 117
Total current liabilities 6,182 7,776
Debt component of convertible
subordinated term loans -- 2,712
Capital leases 109 246
Shareholders' Equity
Share capital 42,289 13,465
Due from shareholders (451) --
Equity component of
convertible subordinated
term loans -- 505
Deficit (8,135) (4,459)
Translation adjustment (651) (130)
Total Shareholders' Equity 33,052 9,381
Total Liabilities and
Shareholders' Equity $ 39,343 $ 20,115
SOURCE Positron Fiber Systems Corporation |
