Cabletron Systems Announces First Quarter Results
ROCHESTER, N.H.--(BUSINESS WIRE)--June 22, 1998--Cabletron Systems (NYSE:CS - news) announced today revenues of $365.7 million for the first quarter of fiscal 1999, ended May 31, 1998. Before one-time charges related to the acquisition of Yago Systems, Inc., the Company reported a profit.
In addition, Cabletron also announced it has signed a definitive agreement to acquire NetVantage (Nasdaq:NETVA - news), a leading provider of Ethernet workgroup switching products.
Net sales for the first quarter of fiscal 1999 were $365.7 million, as compared with $362.7 million in the first quarter of fiscal 1998. Net income for the quarter was $6.0 million, or $0.04 per share on a diluted basis, exclusive of special charges of $158.3 million (net of tax) or $0.97 per share, compared to net income of $58.8 million or $0.37 per share on a diluted basis.
First quarter of fiscal 1999 special charges were related to purchase accounting treatment for the acquisition of YAGO Systems, Inc. These included one-time charges for in-process research and development of $150.0 million ($145.2 million, or $0.89 per share on a diluted basis, net of tax) and acquisition related expenses of $13.6 million ($13.1 million, or $0.08 per share on a diluted basis, net of tax).
Including these items and Cabletron's operating profit, Cabletron reported a net loss for the first quarter of fiscal 1999 of $152.3 million, or $0.93 per share, compared with net income of $58.8 million, or $0.37 per share on a diluted basis, in the first quarter of fiscal 1998.
''New initiatives, including an expanded channel program, aggressive acquisition strategy, as well as a renewed focus on our core product lines, helped contribute to Cabletron's performance this quarter,''said Craig Benson, Cabletron's chairman, CEO and cofounder. ''In addition, cost synergies played a significant role in the quarter and will continue as an ongoing focus.'' About Cabletron Cabletron Systems, a recognized leader in high-performance computer networking products, provides dependable network access and communications to millions of people throughout the world under its Smart Networking architecture. With scaleable products designed for Fortune1000 enterprise networks, service providers and small businesses, Cabletron provides simple, reliable and cost-effective business solutions for the information age. The statements in this press release regarding future events or results constitute forward looking information, and actual results could differ materially. Among the factors that could cause actual results to differ are competitive conditions, the adverse margin impact of competition and lower margin reseller sales, difficulties in assimilating the operations, technologies and products of recently acquired companies, risks of entering new markets and distribution channels, and changes in overall demand 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 1998 filed on May 29, 1998.
CABLETRON SYSTEMS, INC.
Consolidated Condensed Statements of Operations (three months ended
May 31, 1998 and 1997)
(in thousands, except per share data)
(unaudited)
First Quarter
1999 1998
Net sales $365,747 $362,688
Cost of sales 209,562 153,561
Gross profit 156,185 209,127
Operating expenses:
R & D 54,209 43,616
S G & A 96,742 80,915
Special Charges 163,550 ---
Operating income (loss) (158,316) 84,596
Interest income 3,839 4,801
Income (loss) from operations
before income taxes (154,477) 89,397
Income tax expense (benefit) (2,177) 30,573
Net income (loss) ($152,300) $58,824
Earnings (loss) per share ($0.93) $0.37
Weighted average number of common
shares outstanding 163,394 159,503
Note: Included in the 1999 first quarter results were $163.6 million
($158.3 million net of tax) of special charges related to the
acquisition of YAGO Systems, Inc. in March 1998. Excluding these
one-time charges, first quarter net income would have been $6.0
million or $0.04 per share.
CABLETRON SYSTEMS, INC.
Consolidated Condensed Balance Sheets (May 31, 1998 and
February 28, 1998)
(in thousands)
(unaudited)
5/31/98 2/28/98
Assets
Cash & short-term investments $295,768 $324,057
Accounts receivable (net) 249,425 241,181
Inventories 271,470 309,667
Deferred income taxes 77,988 81,161
Other assets 88,042 78,084
Total current assets 982,693 1,034,150
Investments 122,933 123,272
Property, plant & equipment (net) 243,132 244,730
Intangible assets 51,551 36,867
Deferred income taxes 155,222 155,251
Total assets $1,555,531 $1,594,270
Liabilities & Stockholders' Equity
Accounts payable $73,760 $79,969
Other current liabilities 347,089 392,781
Total current liabilities 420,849 472,750
Long term obligations 132,500 132,500
Total liabilities 553,349 605,250
Stockholders' equity 1,002,182 989,020
Total liabilities &
stockholders' equity $1,555,531 $1,594,270
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