LU paid 13X sales for Asend, a $20B deal. On today's closing price, HLIT paid 6.8x for 1999 Divi sales............
ascend.com
Press Contact:
Michael Ashby
EVP & CFO
(510) 747-2618
Kristina Graziano
Investor Relations
(510) 747-2345
Tim Donovan
Public Relations
(510) 747-2761
Ascend Communications Reports Fourth Quarter And Year End 1998 Financial Results
Alameda, CA, January 19, 1999?Ascend Communications, Inc. (NASDAQ-ASND), 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 fourth quarter ended December 31, and for the year 1998. Fourth quarter net sales were $475.9 million and pro forma net income for the fourth quarter was $69.8 million ($0.31 per share, diluted), excluding one-time charges related to the acquisition of Stratus Computer, Inc. as discussed below.
Compared with the fourth quarter 1997, these pro forma results represent a 63% increase, including the Carrier Signaling Group of Stratus, over net sales of $292.5 million and a 47% increase over net income of $47.6 million ($0.24 per share, diluted).
For the year, net sales were $1.479 billion, a 27% increase over net sales of $1.167 billion in 1997. Pro forma net income, which excludes the effect of one-time charges related to purchased research and development discussed below, was $247.3 million ($1.18 per share, diluted) for 1998. These results represent a 17% increase over pro forma net income of $211.2 million ($1.06 per share, diluted) in 1997.
During the fourth fiscal quarter 1998, Ascend completed the acquisition of Stratus Computer, Inc. and took a one-time charge of $267.0 million, as a write-off of purchased research and development.
Commenting on the Company's fourth quarter results, Mory Ejabat, president and chief executive officer of Ascend said, "We are pleased to report strong revenue performance in Ascend's fourth quarter. Our Core Systems Division showed strong growth in sales as service providers continue building out next-generation frame relay and ATM backbone networks. The newly integrated Carrier Signaling Group from Stratus also provided a boost to revenues this quarter by posting better than expected sales."
Continuing, Mr. Ejabat said "This year has been an exciting year for Ascend. As we tightened up our focus on delivering proven next-generation technologies, such as our "smart core" GX 550 ATM switch and our award winning Max TNT remote access concentrator, we began to see the benefits pay off. According to independent industry reports, Ascend has gone from the third position earlier in the year to the number one market position in ATM to service providers worldwide. In addition, such industry reports reconfirm Ascend's undisputed number one market share position in worldwide remote access concentration.
This year Ascend announced a number of new next-generation technologies and services to meet the increasing demands of the rapidly growing service provider market. The Ascend Signaling Gateway (ASG) is one of those exciting technologies announced this year. This product, in conjunction with the award-winning Max TNT, bridges the gap between existing voice and data networks and provides a seamless migration path from traditional circuit-switched networks to a new packet-based integrated network architecture, called the Next-Generation Public Network.
Many service providers have chosen to standardize on Ascend's next-generation technologies and services to assist them in building new cost-effective, integrated network architectures. Ascend is proud to have in its portfolio of customers an impressive and growing list of blue-chip service providers worldwide.
Continuing, Mory Ejabat said "We are pleased to close this exciting year with an announcement of our pending merger with Lucent Technologies, Inc. This merger is subject to both shareholder and various regulatory approvals. Our strength in carrier-class data services, IP, Frame Relay and ATM, combined with Lucent's expertise in optical networking, communications systems and business telephone systems, make for a powerful combination.
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Ascend Communications, Inc.
Combined Consolidated Statements of Operations, Unaudited
(In Thousands, Except Per Share Data)
Quarter Ended December 31 Year Ended December 31
1998 1997 1998 1997
Net Sales $ 475,867 $ 292,547 $1,478,682 $1,167,352
Cost of sales 183,598 105,325 543,971 413,570
Gross profit 292,269 187,222 934,711 753,782
Operating expenses:
Research and development 75,386 40,401 216,235 155,996
Sales and marketing 94,429 69,513 302,045 249,129
General and administrative 26,061 8,248 78,864 35,267
Purchased research and development 266,953 - 266,953 231,100
Cost of mergers - - (18,279) 150,271
Total operating expenses 462,829 118,162 845,818 821,763
Operating income (loss) (170,560) 69,060 88,893 (67,981)
Interest income, net 10,939 5,290 28,102 23,029
Income (loss) before income taxes (159,621) 74,350 116,995 (44,952)
Provision for income taxes 37,566 26,774 136,649 79,422
Net income (loss) $ (197,187) $ 47,576 $ (19,654) $ (124,374)
Net income (loss) per share - Basic $ (0.92) $ 0.25 $ (0.10) $ (0.66)
Net income (loss) per share - Diluted $ (0.92) $ 0.24 $ (0.10) $ (0.66)
Number of shares used in per share Calculation - Basic 214,299 190,375 199,291 189,129
Number of shares used in per share Calculation - Diluted 214,299 198,461 199,291 189,129
Ascend Communications, Inc.
Combined Consolidated Balance Sheets, Unaudited
(In Thousands)
Dec. 31, 1998 Dec. 31, 1997
ASSETS
Current assets:
Cash, cash equivalents and investments. $ 679,955 $ 475,427
Accounts receivable, net 390,103 234,183
Inventories 197,896 99,637
Other current assets 209,117 105,340
Total current assets 1,477,071 914,587
Investments 494,387 101,212
Furniture, fixtures and equipment, net 282,260 114,351
Other assets 277,760 7,744
Total assets $ 2,531,478 $ 1,137,894
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 426,286 $ 168,638
Total current liabilities 426,286 168,638
Other long-term liabilities 11,048 -
Stockholders' equity:
Common stock 220 191
Additional paid-in capital 2,022,968 878,455
Retained earnings 70,956 90,610
Total stockholders' equity 2,094,144 969,256
Total liabilities and stockholders' equity $ 2,531,478 $ 1,137,894
About Ascend Communications
Ascend Communications, Inc. (NASDAQ: ASND) 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 email 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 Investor Relations page.
The foregoing statements may contain forward-looking statements that are based on current expectations and involve risks and uncertainties. Actual results could differ materially from these expectations as a result of factors including, but not limited to, the Company's success in developing, introducing or shipping new products, competition, the mix of distribution channels employed, the Company's dependence on single or limited source suppliers for certain components used in its products, risks inherent in international sales, seasonality and general economic conditions. These and other factors are discussed in Ascend's 10-K, 10-Q and other filings made periodically with the Securities and Exchange Commission.
Ascend is headquartered at One Ascend Plaza
1701 Harbor Bay Parkway
Alameda, California 94502
Phone: 800/ASCEND4
Fax: 510/814-2300
Email: info@ascend.com |
