ASCEND COMMUNICATIONS REPORTS FIRST QUARTER 1999 FINANCIAL RESULTS -- REVENUES INCREASE 67% COMPARED WITH FIRST QUARTER 1998 BUSINESS EDITORS/HIGH-TECH WRITERS
--------------------------------------------------------------------------------
ALAMEDA, Calif.--(BUSINESS WIRE)--April 27, 1999--Ascend
Communications, Inc. (NASDAQ:ASND.O), a leader in wide area networking
(WAN) and Intelligent Networking (IN) solutions for providers and
users of the next-generation public network, today reported financial
results for the first quarter ended March 31, 1999.
First quarter net sales were $509.4 million, compared with $305.1
million for the same period a year ago, representing an increase in
revenues of 67%. Excluding the effect of the credit to in-process
research and development, as discussed below, net income was $84.9
million or $0.36 per share, diluted. These pro forma results represent
growth in net income of 62%, compared with $52.4 million or $0.26 per
share, diluted, in the first quarter 1998.
During the first quarter, Ascend recorded a credit to the
purchased research and development expense related to the acquisition
of Stratus Computer, Inc., in the fourth quarter of 1998. The credit
resulted from the reallocation of negative goodwill arising from the
sale of the non-telecommunications business units of Stratus and
positively impacted net income for the quarter. As a result, actual
net income for the first quarter was $108.8 million or $0.46 per
share, diluted.
"We are extremely pleased with the first quarter performance
across all areas of the business, particularly in the Access Switching
Division where reported revenues were better than expected," said Mory
Ejabat, Ascend Communications' president and chief executive officer.
"Our results clearly indicate a broad acceptance of the Ascend
products within the growing public service provider market and affirms
our momentum in the marketplace."
Ejabat continued, "Public telecommunications is a rapidly growing
industry where the volume of Internet, voice, video and corporate data
communications are driving the need for next-generation, integrated,
packet-based technologies suitable for carrier-class networks. Ascend
is committed to designing, building and delivering these key
technologies for our customers to be successful as they expand their
capabilities on a global basis."
The company continued to expand its next-generation product
offerings this quarter with the introduction of Channelized DS3 Frame
Relay and IP Multi-Protocol Label Switching (MPLS) modules with new
high-availability features for the CBX 500 ATM switches. Ascend is
currently the only vendor delivering a carrier-class implementation of
the emerging MPLS standard on all WAN switching platforms, and is the
only equipment vendor delivering an integrated carrier-class platform
for ATM, Frame Relay and IP.
In access switching, Ascend announced delivery of an ATM
OC-3/STM-1 card for the high-density Max TNT and DSLTNT platforms,
enabling service providers to connect directly to core ATM networks.
Additionally, Ascend announced that it is the first company to ship
high-speed Symmetric Digital Subscriber Line (SDSL) with 2.3 Mbps.
This new multi-rate technology allows service providers the ability to
create tailored next-generation services, including real-time
conferencing, high-speed multimedia technologies and remote office
applications.
This quarter, the latest figures from several industry analyst
groups confirmed the company's leadership position in numerous WAN
switching segments. Reports covering the fourth quarter of 1998, from
Cahners In-Stat and Synergy Research, recognized Ascend as the number
one leader in worldwide ATM, Frame Relay and Multiservice WAN
switching markets to service providers. Also in the fourth quarter
1998, Ascend was recognized by Dell'Oro, Dataquest, and Cahners
In-Stat as the number one leader of Remote Access Concentrator ports
shipped worldwide.
"Our continued market leadership and success in delivering key
technologies for the next-generation public network has clearly made
Ascend successful as an industry leader in this marketplace," Mr.
Ejabat said. "Together with Lucent, we will be able to serve more
markets and reach more customers than ever before by providing a more
robust, end-to-end solution."
In January, Ascend announced an agreement to merge with Lucent
Technologies Inc., a leading supplier of telecommunications equipment
and services. The transaction will be accounted for as a pooling of
interests where, under the terms of the agreement, each share of
Ascend will be converted into 0.825 shares of Lucent. The exchange
ratio has been adjusted to 1.65 to reflect Lucent's recent 2-for-1
stock split.
Concluding, Mr. Ejabat said, "Clearly our customers want to build
and deploy new multiservice networks that encompass data, voice,
optical networking, wireless networking, communications software and
service solutions. Under the combined companies, it is our intention
to deliver these technologies, so that service providers can make the
Next-Generation Public Network a reality."
About Ascend Communications
Ascend Communications, Inc. (Nasdaq: ASND.O) develops,
manufactures, sells and services 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 www.ascend.com, or send e-mail to
info@ascend.com. For Investor Relations, please call our
communications hotline at 800/648-3059 or 760/704-4423 (outside the US
& Canada). Additional investor information can also be accessed on our
Web site at: ascend.com. Ascend is headquartered
at One Ascend Plaza, 1701 Harbor Bay Parkway, Alameda, Calif. 94502;
phone is 800/ASCEND4 and fax is 510/814-2300.
This release, other than historical financial information,
contains forward-looking statements that involve risks and
uncertainties which could cause actual results to differ materially
from actual future events or results. For instance, factors which
could cause actual events or results to differ from anticipated events
or results include the rate of development of new and enhanced
technology by Ascend and its competitors, the integration of new
businesses, the timing of introduction and market acceptance of new
products by Ascend and its competitors, competitive pricing actions
and marketing programs, among others. Readers are referred to the
documents filed by Ascend Communications with the Securities and
Exchange Commission, specifically the most recent reports on forms
10-K and 10-Q, which identify important risk factors which could cause
actual results to differ from those contained in the forward-looking
statements.
-0-
*T
Ascend Communications, Inc.
Combined Consolidated Statements of Operations, Unaudited
(In Thousands, Except Per Share Data)
Quarter Ended March 31,
1999 1998
--------- ---------
Net sales $ 509,395 $ 305,114
Cost of sales 192,026 109,810
--------- ---------
Gross profit 317,369 195,304
Operating expenses:
Research and development 83,904 40,988
Sales and marketing 100,530 67,339
General and administrative 17,135 10,044
In-process research and development (23,919) --
--------- ---------
Total operating expenses 177,650 118,371
--------- ---------
Operating income 139,719 76,933
Interest income 10,862 4,964
--------- ---------
Income before income taxes 150,581 81,897
Provision for income taxes 41,798 29,525
--------- ---------
Net income $ 108,783 $ 52,372
========= =========
Net income per share - Basic $ 0.49 $ 0.27
========= =========
Net income per share - Diluted $ 0.46 $ 0.26
========= =========
Number of shares used in per share
Calculation - Basic 221,900 192,849
========= =========
Number of shares used in per share
Calculation - Diluted 238,685 203,245
========= =========
Ascend Communications, Inc.
Combined Consolidated Balance Sheets, Unaudited
(In Thousands)
March 31, Dec. 31,
1999 1998
---------- ----------
ASSETS
Current assets:
Cash, cash equivalents
and short-term investments $ 708,051 $ 679,955
Accounts receivable, net 453,968 390,103
Inventories 242,449 197,896
Other current assets 231,715 209,117
---------- ----------
Total current assets 1,636,183 1,477,071
Investments 525,861 457,387
Property and equipment, net 283,203 282,260
Other assets 319,916 314,760
---------- ----------
Total assets $2,765,163 $2,531,478
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 456,667 $ 426,286
---------- ----------
Total current liabilities 456,667 426,286
Deferred income taxes 11,030 11,048
Stockholders' equity:
Common stock 222 220
Additional paid-in capital 2,117,505 2,022,968
Retained earnings 179,739 70,956
---------- ----------
Total stockholders' equity 2,297,466 2,094,144
---------- ----------
Total liabilities and
stockholders' equity $2,765,163 $2,531,478
========== ==========
*T
--30--lmm/sf*
CONTACT: Ascend Communications
Michael Ashby, 510/747-2266 (EVP & CFO)
Kristina Graziano, 510/747-2345 (Investor Relations)
Tim Donovan, 510/747-2761 (Public Relations)
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS
EARNINGS
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: businesswire.com
Copyright 1999, Business Wire |
