Excel Switching Corporation Announces Results for Third
Quarter; Q3 Revenues Up 36%, Net Income Increased 49%
Over Q3 1997
Business Wire - October 21, 1998 17:21
HYANNIS, Mass.--(BUSINESS WIRE)--Oct. 21, 1998--Excel Switching Corporation
(Nasdaq:XLSW), a leading provider of open switching platforms for telecommunications networks
worldwide, today announced results for the third quarter of 1998.
Revenues for the third quarter of 1998 increased 36% to $32.1 million from $23.6 million for the third
quarter of 1997. Net income for the third quarter of 1998 increased 49% to $7.7 million from $5.2
million for the same period in 1997. Diluted earnings per share were $0.20 for the third quarter of
1998 versus $0.15 in the third quarter of 1997, an increase of 33%.
Revenues for the first nine months of 1998 increased 38% to $86.4 million from $62.6 million for the
first nine months of 1997. Net income for the first nine months of 1998 increased 55% to $19.5
million from $12.6 million for the same period in 1997. Diluted earnings per share were $0.50 for the
first nine months of 1998 versus $0.37 in the first nine months of 1997, an increase of 35%.
Revenue gains represent sales to the company's traditional enhanced service customer base, as well as
increased sales into the infrastructure markets. Net income increased due to productivity gains within
the manufacturing process and reduced component costs, resulting in a higher gross margin and
additional interest income. These gains were partially offset by increased operating expenses,
particularly those related to engineering, research and development, and sales and marketing activities.
During the quarter, Excel made significant progress in key strategic areas including:
Expanded presence in the wireless and wireline infrastructure markets
--Motorola, Inc's Cellular Infrastructure Group (CIG) announced that it intends to purchase and
deploy Excel's EXS(tm) platform in wireless local loop applications as a Network Interface Unit
(NIU). This would allow Motorola to connect its Code Division Multiple Access (cdmaOne(tm))
WiLL(R) systems directly to existing Public Switch Telephone Network (PSTN) switching centers.
Motorola CIG will also utilize the EXS for a variety of network functions including call processing,
billing information generation, subscriber services and protocol conversion.
--Motorola's Internet Connectivity Services Division (ICSD) chose Excel to deliver the telephony
infrastructure for its new speech-enabled service, code named Myosphere. With Excel's open
switching platform, Motorola ICSD will provide telephone carriers and Internet service providers a
unique turnkey solution for managing wireless and wireline communications.
IP Telephony integration; Continued commitment to provide industry standard solutions
--Excel and VocalTec Communications Ltd., an IP (Internet protocol) communications company,
announced their intention to integrate VocalTec's Ensemble Architecture(tm) IP Telephony solution
and Excel's ONE Architecture(tm) open network expandable switching platform. The goal of the
product integration is to offer a carrier-grade programmable switch which provides a fast-to-market
solution for full IP telephony capabilities.
--Excel and Dialogic Corporation, a leading manufacturer of high-performance computer telephony
components, entered a joint integration and support initiative under which Excel's distributed call
processing software on EXNET Connect will be integrated with Dialogic's DM3 media processing
architecture.
Subsequent to the end of the quarter, Excel announced two strategic acquisitions, Quantum Telecom
Solutions, Inc., a provider of switch-configuration software, and XNT Systems, Inc., a supplier of
intelligent switch control and comprehensive call-processing and control software.
"We are pleased with our financial results for the quarter, and are particularly proud of the new
alliances we formed during the same period with some of the leading companies in the
telecommunications industry," said Robert Madonna, Excel's president and CEO. "Excel's ONE
Architecture platform continues to prove itself as a platform that carriers can utilize as an integral part
of their network expansion."
About Excel
Excel Switching Corporation is a leading provider of open switching platforms for telecommunications
networks worldwide. Excel develops, manufactures, markets and supports a family of open,
programmable, carrier-class switches that address the complex enhanced services and wireless and
wireline infrastructure needs of network providers. Excel's products are currently deployed in
telecommunications networks in 60 countries throughout the world. Visit Excel's website at
xl.com.
Note to Investors:
This release may contain statements which are "forward looking," and is subject to risks and
uncertainties that could cause actual results to differ significantly from expectations. Factors that might
cause such a difference include, but are not limited to, those relating to: fluctuations in results of
operations; concentration of customers within market segments; management of growth; dependence
on and concentration of relationships with application developers, original equipment manufacturers
and systems integrators; length of sales cycle; risk of new product introductions; dependence on
proprietary rights; potential acquisitions; and other risks identified in the Company's Securities and
Exchange Commission filings including those risks identified in the section entitled "Risk Factors" of the
Company's Annual Report for the year ended December 27, 1997 on Form 10-K, as amended.
There can be no assurance that the Company's current gross, operating and net income margins will
be sustainable in future quarterly periods. |
