Terayon Reports Record 1999 Results and a Profitable Pro Forma Q4
I didn't see this posted here, yet...even though we already know the news...
Santa Clara, California. (January 18, 2000) ? Terayon Communication Systems, Inc. (Nasdaq: TERN), a leading supplier of broadband networking equipment, today reported a 206 percent increase in annual revenues for the year ended December 31, 1999, and that the company reached profitability in the fourth quarter on a pro forma basis.
Revenues for the fourth quarter of 1999 grew to $38.7 million, an increase of 200 percent over the revenues for the fourth quarter of 1998 of $12.9 million. In the quarter, Terayon achieved profitability, with pro forma net income of $1.2 million, or $.04 per share diluted. This excludes non-cash charges for in-process research and development and the amortization of intangible assets related to the acquisition of Imedia Corporation and Radwiz Ltd. and the cost of two warrants to purchase common stock. Including the charges related to amortization of intangibles, in-process research and development and the cost of the two warrants, the net loss for the fourth quarter of 1999 was $19.0 million or $0.83 per share. This compares to a net loss for the fourth quarter of 1998 of $5.4 million or $0.33 per share. Terayon's results for the fourth quarter of 1999 include the results of Radwiz Ltd. from November 22, 1999, the closing date of the Radwiz acquisition.
For the year ended December 31, 1999, revenues increased over 200 percent to $97.0 million, compared to $31.7 million for 1998. The pro forma net loss for the year ended December 31, 1999 was $8.2 million or $0.40 per share. This excludes non-cash charges for in-process research and development and the amortization of intangible assets related to the acquisition of Imedia Corporation and Radwiz Ltd. and the cost of two warrants to purchase common stock. The net loss for the same period in 1998 was $23.2 million, or $2.58 per share, excluding a dividend of $23.9 million, or $2.66 per share, recorded in connection with certain equity financing. The net loss for the year ended December 31, 1999, including the non-cash charge related to amortization of intangibles, in-process research and development and the cost of the two warrants was $64.1 million or $3.11 per share. The net loss for the same period in 1998, including the dividend, was $47.1 million or $5.25 per share. Terayon's results for the year ended December 31, 1999 include the results of Imedia Corporation from September 16, 1999, the closing date of the Imedia acquisition, and the results of Radwiz Ltd. from November 22, 1999, the closing date of the Radwiz acquisition.
Terayon CEO Zaki Rakib stated, "During the past year, Terayon made significant progress in its evolution as a leading broadband networking company. Our results for the quarter and the year speak for themselves, as we achieved profitability ahead of plan, tripled annual revenue, and increased the market footprint of our broadband systems around the globe.
"I am extremely proud of Terayon's acquisitions and the integration of three leading broadband companies, expediting the Company's entry into MPEG digital video, broadband telephony, and the xDSL market. This also gives us confidence in our ability to deliver an integrated voice, data and video platform at the leading edge of the broadband revolution.
"As a result of the diversification of our product portfolio, our customer base expanded to include North American customers Adelphia, Charter, Comcast, Cox, Rogers Cablesystems, Shaw Communications, Time Warner, and Videotron; Globocabo/Net Brasil in Latin America; European customers Brut‚l‚, Primacom, Telegeneve, Telenet Flanders, and United Pan-Europe Communications (UPC); and Asian operators Jupiter Communications, Kintetsu, MyTV, and Tokyu Cable. The recent announcement of our partnership with Hong Kong's i-CABLE should pave the way for even more extensive broadband deployments across Hong Kong, China, and other strategic Asian markets. We had record fourth quarter shipments of over 400 headend systems and approximately 113,500 cable modems, bringing total shipments to date to 1,528 headends and over 340,800 modems."
Zaki Rakib continued, "With the acquisition of Imedia, Terayon has made a rapid entry into the digital video re-multiplexing market, with deployments by major operators in all geographies. Telegate's broadband voice systems are opening up new market opportunities, particularly in Europe and Asia. And the Radwiz acquisition has provided us with an entry into the growing xDSL market, as well as significant network routing expertise.
"In closing, I would like to acknowledge the hard work and dedication of the entire Terayon team, whose combined efforts resulted in our record quarterly and year-end results, our early achievement of profitability, and the high quality broadband systems that our customers are embracing. I look forward to continued market success in the year ahead."
Terayon Communication Systems is a broadband networking company that provides innovative systems for advanced broadband voice, data and video services. The company's cable modem systems, advanced digital video systems and broadband telephony systems are deployed by leading cable operators worldwide. The company's xDSL access systems deliver innovative telephony and data solutions for the growing SOHO business market. Terayon, based in Santa Clara, California, USA, has sales and support offices worldwide, and is traded on the Nasdaq under the symbol TERN. Terayon can be found on the web at www.terayon.com.
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"Safe Harbor" Statements under the Private Securities Litigation Reform Act of 1995:
Except for the historical information contained herein, this news release contains forward-looking statements, estimates, and assumptions by the Company and other parties that involve risks and uncertainties, including the Company's ability to successfully integrate any acquired companies, the Company's ability to gain new business and offer new products, the expansion of operations by the Company's customers and the deployment of the Company's products in specific markets, as well as the other risks detailed from time to time in the Company's filings with the SEC.
Note: Terayon, the Terayon logo, TeraPro, TeraLink, and TeraComm are registered trademarks of Terayon Communication Systems, Inc. TeraView and CherryPicker are trademarks of Terayon Communication Systems, Inc. All other trademarks are property of their respective owners.
Terayon Communication Systems, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
1999 1998 1999 1998
(1)
Revenues $38,665 $12,920 $97,009 $31,696
Cost of goods sold 25,869 12,495 72,044 34,518
Gross profit (loss) 12,796 425 24,965 (2,822)
Operating expenses:
Research and development 5,910 2,983 17,579 10,685
Cost of product development
assistance agreement 11,176 - 35,147 -
Sales and marketing 6,633 2,132 15,727 6,947
General and administrative 2,787 1,128 7,476 3,223
In-process research and
development 3,600 - 14,600 -
Amortization of goodwill 3,081 - 3,524 -
Total operating expenses 33,187 6,243 94,053 20,855
Loss from operations (20,391) (5,818) (69,088) (23,677)
Net interest income 1,433 423 5,008 449
Net loss (18,958) (5,395) (64,080) (23,228)
Series F convertible preferred stock dividend - - - (23,910)
Net loss applicable to common stockholders ($18,958) ($5,395) ($64,080) ($47,138)
Historical net loss per share, basic and diluted ($0.83) ($0.33) ($3.11) ($5.25)
Shares used in historical per share calculation, basic and diluted 22,732 16,272 20,630 8,986
(1) Derived from audited financial statements.
Terayon Communication Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
1999 1998
(1)
ASSETS
Current assets:
Cash and cash equivalents $32,398 $14,342
Short-term investments 80,594 14,538
Accounts receivable, net 21,296 3,639
Inventories 4,991 3,950
Prepaid expenses and other 4,161 1,856
Total current assets 143,440 38,325
Property and equipment, net 6,157 3,593
Intangibles and other assets 151,639 228
Total assets $301,236 $42,146
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $13,217 $8,600
Accrued payroll and other liabilities 17,850 5,303
Advance from related party - 0
Total current liabilities 31,067 13,903
Non-current liabilities 11,515 140
Stockholders' equity 258,654 28,103
Total liabilities and stockholders' equity $301,236 $42,146
(1) Derived from audited financial statements.
Terayon Communication Systems, Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
1999 1998 1999 1998
Revenues $38,665 $12,920 $97,009 $31,696
Cost of goods sold 24,177 12,495 70,157 34,518
Gross profit (loss) 14,488 425 26,852 (2,822)
Operating expenses:
Research and development 5,704 2,983 17,352 10,685
Sales and marketing 6,304 2,132 15,355 6,947
General and administrative 2,716 1,128 7,397 3,223
Total operating expenses 14,724 6,243 40,104 20,855
Loss from operations (236) (5,818) (13,252) (23,677)
Net interest income 1,433 423 5,008 449
Net income (loss) applicable to common stockholders $1,197 ($5,395) ($8,244) ($23,228)
Pro forma net income (loss) per share, basic and diluted $0.04 ($0.33) ($0.40) ($2.58)
Shares used in pro forma per share calculation, basic and diluted 27,640 16,272 20,630 8,986 |
