3Com Reports Fourth Quarter and Fiscal 1999Results; Net Income Increases 38% from Same Quarter a Year Ago
3Com Reports Fourth Quarter and Fiscal 1999Results; Net Income Increases 38% from Same Quarter a Year Ago
June 22, 1999 04:31 PM
SANTA CLARA, Calif.--(BUSINESS WIRE)--June 22, 1999--3Com Corporation COMS today reported financial results for its fourth fiscal quarter, ended May 28. Sales for the quarter were $1.416 billion compared to sales of $1.375 billion reported in the same quarter a year ago. Fourth quarter sales of systems products increased 17 percent from the same quarter a year ago to $784.7 million and comprised a record 55 percent of total sales. Client access product sales decreased ten percent from the year-ago quarter to $630.9 million and comprised 45 percent of total sales.
"As we enter fiscal 2000, rapid growth of emerging new businesses such as handheld computers, IP Telephony, and broadband access, coupled with success of our systems solutions, are transforming the growth profile of the company," said Eric Benhamou, chairman and chief executive officer. "Additionally, with the completion of our SAP enterprise resource planning rollout and focus on balance sheet performance, we continue to strengthen our operational effectiveness."
Net income of $87.5 million, or $0.24 per share, increased 38 percent from net income of $63.6 million, or $0.17 per share, posted in the year-ago quarter. Fourth quarter net income included a net pre-tax charge of $5.6 million for purchased in-process technology associated with the acquisition of NBX Corporation, and a net pre-tax credit of $4.9 million related to changes in previously recorded merger and restructuring expenses. Excluding these items, pro forma net income was $88.0 million, or $0.24 per share. Net income in the fourth quarter of fiscal 1998 included an $8.4 million charge for purchased in-process technology associated with the Lanworks Technologies, Inc. acquisition, and a net credit of $4.9 million related to past merger activities and the disposition of real estate. Excluding these items, pro forma net income in the year-ago quarter was $65.9 million, or $0.18 per share.
Sales for the year were $5.8 billion compared to $5.4 billion in fiscal 1998. Net income was $403.9 million, or $1.09 per share, compared to $30.2 million, or $0.08 per share reported in fiscal 1998. Net income for fiscal 1999 included a net pre-tax charge of $12.7 million for purchased in-process technology associated with the acquisitions of Smartcode Technologie, certain assets of ICS Networking, Inc., and NBX Corporation and a net pre-tax credit of $21.8 million related to changes in previously recorded merger and restructuring expenses. Excluding these items, pro forma net income for fiscal 1999 was $397.7 million, or $1.08 per share. Net income for fiscal 1998 included a purchased in-process technology charge of $8.4 million associated with the acquisition of Lanworks and a net charge of $253.7 million primarily related to U.S. Robotics merger-related activities and the disposition of real estate. Excluding these items, pro forma net income for fiscal 1998 was $246.1 million, or $0.67 per share.
During the quarter, 3Com made a series of significant news announcements regarding products and technology, services, alliances, customer wins and product awards. For a comprehensive review of these announcements and other company news, please refer to the "Q499 Highlights" document at 3com.com.
This press release includes forward looking statements about sales growth of systems solutions, as well as in emerging converged network technologies such as handheld computing, IP telephony including LAN telephony and Voice-over-IP, broadband access including cable and xDSL and home networking, and resulting benefits such as the transformation of the company's growth profile and as such is subject to the risks and uncertainties including, but not limited to, fluctuation in demand for the company's products, the timely availability of new products, the impact of competitive products and pricing, and the other risks detailed in the Company's SEC reports, including 3Com's Form 10-K for the year ended May 31, 1998 and Form 10-Q for the quarter ended February 28, 1999. Actual results may vary materially.
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