KANATA, ONTARIO--Newbridge Networks Corporation today announced
financial results for the Company's second quarter of fiscal 2000,
which ended October 31, 1999. Revenue for the quarter was $481
million and net earnings were $302 million. Earnings per share,
which include investment gains and the amortization of acquired
intangible assets, were $1.67 per share basic and $1.52 per share
fully diluted under Canadian GAAP, or U.S. 98 cents per share
basic and U.S. 97 cents per share diluted under U.S. GAAP.
Earnings per share for the quarter, excluding the effect of items
related to acquisitions and non-recurring items, were 12 cents per
share basic and fully diluted under Canadian GAAP, or U.S. 8 cents
per share basic and diluted under U.S. GAAP.
"The disappointing results of the quarter compelled us to
accelerate the deployment of a comprehensive strategic action
plan, which was unanimously approved today by the Company's Board
of Directors," said Terence Matthews, chairman and chief executive
officer, of Newbridge Networks. "The principal objective is to
leverage the power of our industry leading products to create
shareholder value. To achieve this objective, we are fully
committed to considering all strategic options."
"The immediate operational actions we are undertaking represent a
significant restructuring of the Company," said Pearse Flynn,
president and chief operating officer. These actions include
cutting overhead costs; streamlining operations; and sharpening
our product portfolio and R&D focus to concentrate on the
Company's areas of strength, in particular ATM+IP switches, and
broadband wireless and digital subscriber line (DSL) access
product families. Specific actions include outsourcing of volume
manufacturing, outsourcing of global customer service, and
headcount reductions totaling more than 10 percent of the
Company's workforce, primarily in the areas of overhead and
administration.
"Newbridge's competitive position is anchored by a number of key
assets. These include a broad and solid customer base of over 350
of the world's largest carriers in more than 100 countries
throughout the world; a world-class R&D organization comprising
some 2,000 experienced networking engineers and designers; and
market leading positions in key technologies such as ATM+IP
switching and broadband wireless.
"We are building on these strengths with the introduction this
quarter of our next generation multi-protocol platform. This new
product family breaks new ground in the industry. With unmatched
traffic management, carrier class reliability, and high density,
high speed optical networking interfaces from OC-3 to OC-192, it
is the only product in the market capable of scaling in service
from 50 Gbit/sec to 5 Tbit/sec. Customer response to this product,
as well as to our broadband access products, has been exceptional.
The Company's product portfolio positions it squarely in the
highest growth areas of wide area networking."
The Company's IP+ATM multi-protocol switch revenues increased by
approximately 70 percent compared with a year ago, while order
intake was up over 80 percent year-over-year and approximately 20
percent on a sequential basis. There were approximately 200
customers for the Company's ATM+IP product line in the quarter,
including more than 50 new customers this quarter. In addition,
Newbridge is winning one out of every two contract bids for
broadband wireless networks on a worldwide basis.
"The growth prospects for the wide area network ATM+IP switches
and broadband access markets are strong," concluded Mr. Flynn.
"Newbridge is focused squarely on these markets and is a solid
leader in these spaces, with key customers that include SBC,
British Telecom, France Telecom, Deutsche Telecom, Cable and
Wireless, Bell Canada and AT&T. The Company is introducing a new
portfolio of IP+ATM switched routers and broadband access products
that significantly expand our addressable markets."
This news release may include certain forward-looking statements
that involve risks and uncertainties. Actual results may differ
materially from results indicated in any forward-looking
statements. The Company cautions that, among other things, in
view of the rapid technological changes in the networking
industry, if technologies or standards supported by the Company's
products or common carrier service offerings based on the
Company's products become obsolete or fail to gain widespread
commercial acceptance, the Company's business may be adversely
affected. Additional information identifying risks and
uncertainties is contained in the Company's most recent Form 10-Q
quarterly report and Form 10-K annual report filed with the SEC.
Newbridge Networks designs, manufactures, markets and services
wide area networking solutions for Internet service providers;
local, long-distance, and wireless communications companies; cable
television carriers; and enterprise customers in more than 100
countries. The Company leverages its relationship with a growing
family of Newbridge Affiliate companies and strategic alliances
with numerous other networking companies to deliver complete,
end-to-end solutions. Newbridge customers include the world's 350
largest telecommunications service providers and more than 10,000
corporations, government organizations and other institutions.
Founded in 1986, the Company employs more than 6,000 people on six
continents. News and information are available at
www.newbridge.com.
Newbridge and logo are registered trademarks of Newbridge Networks
Corporation.
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