Monday October 18, 4:35 pm Eastern Time (Q2 FY00 Results)
Company Press Release
SOURCE: Digital Microwave Corporation
Digital Microwave Corporation Reports Second Quarter
Financial Results For Fiscal Year 2000
Sales, Profit, Orders, and Cash Increase
SAN JOSE, Calif., Oct. 18 /PRNewswire/ -- Digital Microwave
Corporation (Nasdaq: DMIC - news) today reported results for
the second quarter of fiscal year 2000, ended September 30,
1999. Sales were $68.5 million, a 24% increase in sales compared
to $55.3 million for the second quarter of the prior year.
Net income for the fiscal year 2000 second quarter was $1.3
million ($0.02 per share) compared to a net loss of $11.1
million ($0.18 per share) for the second quarter a year ago.
As a result of the merger with Innova Corporation on October
8, 1998, which was accounted for as a pooling of interests,
the financial results for prior periods have been restated.
During the second quarter of fiscal year 2000, the Company
received $71.2 million in new orders, compared to $57.7
million in the second quarter of fiscal year 1999, an
increase of 23%. The backlog at September 30, 1999, was
$68.4 million.
``We are pleased to report continued growth in our business
and financial performance during this quarter,' commented
Charles D. Kissner, chairman and chief executive officer.
``We returned to profitability last quarter, and profits
increased significantly during this period. In addition, we
realized a significant improvement in product margins as
compared to the second quarter a year ago, while cash
increased to $31.0 million. The focus placed in this quarter
and prior periods on strengthening the Company's operations
and balance sheet performance is yielding good results.
``Product developments this quarter cemented our
differentiation in the arena of high-capacity wireless
broadband access. We have now announced that the Altium(TM)
radio product line rollout will be completed by December of
this year for all frequencies except 38 GHz, which will be
available in early 2000. These developments establish the
Altium radio as the most deployable and most spectrally
efficient wireless broadband access product on the market.
In addition, on October 15 we announced the development of
a new proprietary chip set technology called Velocity that
paves the way for future products offering ultra-high capacity.
``Revenues from the Altium radio products more than doubled
during the quarter as compared to the prior quarter.
``This past week we participated in the world's largest
telecommunications event-TELECOM 99, sponsored by the
International Telecommunications Union (ITU) every four
years in Geneva, Switzerland. Customer response to the full
range of our products was exceptionally high, and wireless
technologies in general drew high levels of attention at the
event. With the need for data access driving the demand for
capacity in communications networks, we believe we are now
exceptionally well-positioned.'
The statements in this press release that relate to the
impact of new product introductions, market penetration,
restructuring and the Company's momentum are forward-looking.
These forward-looking statements are based on current
expectations and the Company assumes no obligation to update
this information. The Company's actual results could differ
materially from those anticipated in these forward-looking
statements as a result of certain factors, including the
volume and timing of orders for the Company's products, the
ability of the Company and its suppliers to respond to
changes made by customers in their orders, the ability of the
Company to bring its new products to market quickly at cost-
effective prices and to add innovative features that
differentiate its products from those of its competitors,
competition in the microwave and access business,
fluctuations in foreign currency exchange rates, regulatory
developments and general economic conditions. For a
discussion of such factors, see the ``Risk Factors' in the
Company's Form S-3, which was declared effective by the
SEC on October 1, 1999.
Headquartered in San Jose, California, Digital Microwave
Corporation is an acknowledged industry leader in the design
and manufacture of digital microwave solutions for worldwide
telephone network interconnection and access. The company
offers a complete product portfolio that covers the
transmission needs of voice, data and video, with radios
operating across multiple frequencies and capacities ranging
from 64 Kbps to 155 Mbps.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
September 30 September 30
1999 1998 1999 1998
Net Sales $68,527 $55,285 $134,480 $118,496
Cost of Sales 47,911 45,476 95,747 94,978
Gross profit 20,616 9,809 38,733 23,518
Operating Expenses:
Research and development 6,336 6,303 12,104 12,886
Selling, general and
administrative 12,233 14,998 23,746 31,270
Merger and
restructuring charges 0 0 0 7,213
Total operating expenses 18,569 21,301 35,850 51,369
Operating income (loss) 2,047 (11,492) 2,883 (27,851)
Other income (expense) (468) 448 (1,104) 1,353
Income (loss) before
income taxes 1,579 (11,044) 1,779 (26,498)
Provision for income taxes 316 69 356 97
Net Income (loss) $1,263 $(11,113) $1,423 $(26,595)
Basic earnings (loss)
per share $0.02 $(0.18) $0.02 $(0.43)
Diluted earnings (loss)
per share $0.02 $(0.18) $0.02 $(0.43)
Basic weighted average
shares outstanding 63,924 61,492 63,424 61,421
Diluted weighted average
shares outstanding 68,574 61,492 68,315 61,421
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, March 31,
1999 1999
(Unaudited)
Assets
Cash and short-terms investments $31,007 $27,263
Accounts receivable, net 69,137 60,253
Inventories 45,097 50,610
Other current assets 11,530 15,836
Total current assets 156,771 153,962
Property & equipment, net 41,306 43,025
Other assets 4,472 5,177
Total assets $202,549 $202,164
Liabilities and Stockholders' Equity
Current portion of long-term
liabilities $1,535 $1,587
Accounts payable 30,987 25,116
Income taxes payable and other
current liabilities 31,513 42,012
Total current liabilities 64,035 68,715
Long-term liabilities 1,880 2,236
Total liabilities 65,915 70,951
Stockholders' equity 136,634 131,213
Total liabilities and stockholders'
equity $202,549 $202,164
SOURCE: Digital Microwave Corporation |
