Re: "not quite 900%.." VBG, just an 800% overstatement, EOM
I think I said to get from 28 million to 232 million would be nearly a 9X increase, or 800-900%. This was not a year/year figure. Would it be more fair to say their 28 million would have to increase 70% sequentially to reach the analyst's projection in 4 quarters?
Considering JDSU's sequential growth last quarter was 22%, SDLI's was 24%, and CMTO's was 18% --- three of the fastest growing companies in my portfolio --- I'd say TERN has set a high bar for itself.
While we're on the subject of revenues, let's go over Terayon's last report:
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SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 18, 2000--Terayon Communication Systems, Inc. (Nasdaq:TERN - news), 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.
>>>>>
Note the "200 percent increase in annual revenues" includes the $9 million they couldn't recognize from Rogers. Back that out and the increase is 114%. But this isn't exactly a fair comparison, either. What about the Radwiz earnings that were included in 1999 that didn't exist in 1998? To get a fair year over year comparison, you'd have to back out those numbers, too. A meaningful "pro forma" report compares on-going operations. I can't find a number for Radwiz for Q4, but their Q3 revenues were 1.5 million. Since Imedia's revenues were able to bring Q4 results from an expected loss of .19 to a gain of .04, can we assume that 1.5 million would have grown to, what, 2.5 million in Q4? If so, let's back that out of the $28 million for total revenues of $25.5 million. That brings y/y growth to right around 100%. I'd call their official 200% growth number about 100% off.
It's interesting, too, what Terayon's numbers exclude:
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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.
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The same revenue recognition was used in the yearly figures, this time including both Imedia and Radwiz numbers when comparing year over year gains.
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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.
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What would the percentages have been if a true pro forma comparison had been done?
I'm glad you brought up the subject of numbers as I never would have initiated the subject myself. Slippery little devils, aren't they.
Pat |
