All: Here's the full earnings release:
Tekelec Reports Fourth Quarter and 1999 Year-End Results;
Fourth Quarter Revenues up 56%, Orders up 76% on Solid Growth in All Divisions
Erik Randerson
Director, Investor Relations
(818) 880-7821
erik.randerson@tekelec.com
Calabasas, CA (Wednesday, February 02, 2000): Tekelec (Nasdaq NM:TKLC) today reported financial results for the fourth quarter and year ended December 31, 1999.
Revenues for the fourth quarter increased 56 percent to a record $76.9 million from $49.2 million in the fourth quarter of 1998. Revenues for the 1999 fourth quarter include product sales resulting from the Company's second quarter 1999 acquisition of IEX Corporation. Pro forma net income, excluding net amortization of intangible assets resulting from the IEX acquisition and a one-time tax benefit, increased 29 percent to $12.0 million, or $0.20 per diluted share, from pro forma net income of $9.3 million, or $0.16 per diluted share, before a one-time tax benefit in the fourth quarter of 1998. Including net amortization of intangible assets and a one-time tax benefit in the fourth quarter of 1999, actual net income was $5.2 million, or $0.09 per diluted share. This compares to actual net income of $13.8 million, or $0.24 per diluted share, in 1998's fourth quarter, which also included a one-time tax benefit.
Orders for the Company's products in the fourth quarter increased 76 percent to a record $99.9 million from $56.8 million a year ago. The 1999 quarter includes orders for products resulting from the IEX acquisition. Total backlog at December 31, 1999 was $142.3 million, consisting of $67.9 million in product backlog and $74.4 million in multi-year service agreements.
For the year ended December 31, 1999, revenue increased 28 percent to $226.1 million from $176.7 million in 1998. Pro forma net income, excluding a restructuring charge in the first quarter of 1999, merger-related charges and net amortization of intangible assets resulting from the IEX purchase, was $26.6 million, or $0.45 per diluted share. This compares to pro forma net income of $34.5 million, or $0.59 per diluted share, before one-time gains from the settlement of an insurance claim and a one-time tax benefit in 1998. Including the first quarter restructuring charge, the merger-related charges and net amortization of intangible assets, the Company recorded net income of $0.4 million, or $0.01 per share, in 1999. This compares to net income of $39.2 million, or $0.67 per diluted share, including the one-time gains in 1998.
Tekelec President and CEO Michael L. Margolis commented, "Fiscal 1999, while clearly a transition year for Tekelec, ended on a very strong note. Sales in the fourth quarter increased measurably across all divisions, demonstrating a growing level of interest in our solutions. Notable fourth quarter highlights include:
Orange Personal Communications Services Ltd. placed the largest order to date for our IP7 products, which extend SS7 signaling and signaling services capabilities to IP networks. The order is highly strategic in that it validates two of Tekelec's primary growth strategies - establishing leadership in delivering IP signaling and telephony solutions, and pursuing growth opportunities overseas, with a particular focus on Europe.
Under Tekelec's long-standing STP distribution agreement with Lucent, Winstar placed a significant order that included two STP pairs and our local number portability solution. This represents an important new customer for Tekelec given Winstar's rapid subscriber growth and leadership in delivering innovative broadband wireless services.
To promote open standards in the telecom and Internet industries, we opened up our TALI source code, an SS7 over IP specification, as a free download on our web site. We granted electronic licenses to more than 100 companies that have downloaded TALI, which has been submitted to the Internet Engineering Task Force (IETF) and other standards bodies.
We entered into an international distribution agreement with Unisys related to our IP7 and Eagle products, extending our sales and customer service resources in overseas markets.
Alcatel chose our MGTS i3000 diagnostics platform for testing the emerging broadband technology, Global Packet Radio Services (GPRS), used in GSM networks. Our next-generation i3000 solution extends Alcatel's testing capabilities to include 3G mobile technologies.
In November, we completed the refinancing of $100 million in short-term notes, issued in connection with the IEX acquisition, into convertible subordinated discount notes. This transaction affords Tekelec increased financial flexibility to maximize opportunities going forward.
Recent first quarter highlights include:
Our IEX Call Center division reached an OEM agreement with Davox that extends the potential for TotalNet, our intelligent call routing solution. Under the terms of the agreement, Davox will OEM TotalNet and we will distribute Davox's Ensemble customer contact suite of products.
U S WEST ordered our IP7 Sentinel network surveillance system for deployment in its wireless network, which also features Tekelec's IP7 Secure Gateways. This IP7 Sentinel contract furthers our relationship with US WEST and follows our recent $20 million STP contract with US WEST Communications announced last year."
Margolis concluded, "Reflecting on 1999, Tekelec accomplished several strategic objectives that greatly increase our growth potential in the next several years. Capitalizing on a major industry trend, early in the year we introduced a suite of products -- developed via a combination of internal R&D and a strategic acquisition -- that addresses the fast-growing markets for IP telephony signaling and call control solutions. Initial commitments to our IP7 platform by major players such as U S WEST Wireless, Level 3, and Tellabs, have established Tekelec as an early leader in IP telephony, which clearly represents the largest market opportunity the company has ever faced. Looking ahead, I'm very excited about Tekelec's future as a leading supplier of next-generation network solutions."
Tekelec, a leading supplier of signaling and control systems, develops innovative network switching and diagnostic solutions that enable the convergence of traditional and converged wireline, wireless and IP voice and data communications networks. The company also provides products and solutions for call centers and other telecommunications markets. Tekelec has its headquarters in Calabasas, California, and divisions in Morrisville, North Carolina, and Richardson, Texas. For more information, please visit www.tekelec.com.
Certain statements made in this news release are forward looking and reflect the Company's current intent, belief or expectations and involve certain risks and uncertainties. There can be no assurance that the Company's actual future performance will meet the Company's expectations. As discussed in the Company's 1998 Annual Report on Form 10-K and other filings with the SEC, the Company's future operating results are difficult to predict and subject to significant fluctuations. Factors that may cause future results to differ materially from the Company's current expectations include, among others: timing of significant orders and shipments, product mix, capital spending patterns of customers, market acceptance of the company's products, carrier deployment of intelligent network services, the level and timing of research and development expenditures, regulatory changes and general economic conditions. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Tekelec logo is a registered trademark of Tekelec. IP7 is a trademark of Tekelec. IEX is a registered trademark of IEX. TotalNet is a trademark of IEX.
Stock Bull
|
