Glenayre Technologies Reports First Quarter 2000 Results
*Glenayre reports positive Net Income of $0.02 per share, beats analyst First Call estimates of $0.07 loss.
* Cash increases to $96 million
* ESP business continues strong growth. First Quarter ESP 2000 sales up 75% over last year.
* Wireless Messaging First Quarter Net Sales decline compared to last year as expected
CHARLOTTE, N.C., April 18 /PRNewswire/ -- Glenayre Technologies Inc. (Nasdaq: GEMS - news) today announced results for the first quarter ended March 31, 2000.
Glenayre's net sales for the first quarter 2000 totaled $58.7 million, compared to $61.3 million for the same quarter last year. The decrease of 4% was less than analysts had estimated. As expected, wireless messaging net sales for the first quarter 2000 decreased as compared to 1999 primarily due to the slowdown in infrastructure system buildouts worldwide. Enhanced Services Platform (ESP) net sales for the first quarter 2000 were up 75% over last year, primarily due to strong net sales domestically. Glenayre sold its Western Multiplex division in November 1999. Its results are now reported as a discontinued operation and first quarter 1999 has been restated accordingly.
Income from operations improved to income of $751,000 in the first quarter 2000 compared to a loss of ($10.5) million in the same time period last year. The improvement was primarily related to increased gross profit margins due to a higher revenue mix of Enhanced Services Platform Products and decreased expenses associated with previously announced cost reduction programs. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was positive $5.8 million for the first quarter 2000 compared to a positive $1.8 million in fourth quarter 1999 and negative $2.2 million in first quarter 1999. Income per share from continuing operations for the first quarter 2000 was $.02 per share as compared to a loss of ($0.03) last year. The results were better than the ($0.07) loss per share analysts had predicted.
``We are extremely pleased with our first quarter results,' stated Eric Doggett, Glenayre's president and chief executive officer. ``To become profitable two quarters ahead of expectations and continue to strengthen our balance sheet as we've done, shows the strategy we embarked upon last fall is paying off. These results represent a great deal of hard work and determination within our organization. We haven't seen this type of financial performance in quite some time,' said Doggett. ``Our EBITDA for the first quarter is the highest since the third quarter of 1998.'
Doggett continued, ``The Enhanced Services Platform business continues to be a growth engine for us. This area of the business was up 75% from the first quarter of 1999 and up 7% from the record fourth quarter 1999. These results are even more impressive considering we were in the midst of transitioning the ESP manufacturing to Quincy from Vancouver. This product line has had recent notable success in the domestic fixed market place with new customers such as Cox Communications, the first cable telephony customer, and Urban Media, a nationwide Competitive Local Exchange Carrier (CLEC) with a shared facilities strategy. The entire global ESP customer base has participated in this success and much of this impressive growth can be attributed to the success of Glenayre applications in our customer's market place.'
``As anticipated, the paging infrastructure business has stabilized, and the restructuring completed last fall assures us we are properly sized for this market,' Doggett said. ``We see exciting dynamics in the wireless data market place, which creates opportunities for our two-way infrastructure and device product lines later in the year. We believe the activity in this market with the announced mergers and alliances shows that ReFLEX-based wireless two-way data communications will continue to be an important communication medium going forward.'
``Our corporate tag line 'Solutions for an @ctive World,' captures our strategy of providing complete end-to-end communication solutions for our customers,' Doggett stated. ``This quarter we announced several very important applications partners. These partnerships range from GoSMS, a personalized web content portal to complement our unified messaging and wireless internet solutions, to the @ctiveLink two-way module for the Handspring Visor Personal Digital Assistant (PDA) to be launched in third quarter. As I mentioned, these partnerships and others are a critical part of our growth strategy and I'm pleased with the progress we've made in this area.'
Doggett concluded, ``As we begin to see 2000 unfold, we leave the first quarter in a very positive financial position. Our balance sheet is very strong without any debt. We currently have four times the cash on hand than we did at the end of first quarter 1999. Our customers are embracing our strategy of providing solutions for an active and IP-centric world. Our earnings growth demonstrates the positive financial impact associated with this repositioning, as well as the Glenayre team's commitment to the successful execution of this strategy. Looking toward the remainder of 2000, we see our ESP business being solid, and our paging infrastructure and device business improving with major launches for two-way data services. Our goals are to deliver profitable growth and to enhance shareholder value during 2000 and beyond.'
Glenayre's first quarter 2000 earnings teleconference will be held Wednesday, April 19, 2000, at 8:30 a.m. ET. To listen to the call, dial (913) 981-5510. Replay of the teleconference will be available by calling (719) 457-0820. Reference access code 257845. Audio broadcast and replay of the call also will be available on the company's Web site at www.glenayre.com under Investor Relations.
For more than 35 years, Glenayre has developed and provided leading-edge personal communications systems to a global network of customers. Glenayre's business focus is to deliver its Solutions for an @ctive World(TM) portfolio, leveraging core competencies in the converging sectors of the wireless internet and unified messaging to provide differentiated solutions for today's mobile and active lifestyles. With 1,300 employees and 1999 net sales exceeding $238 million, Glenayre provides a complete line of wireless messaging products and systems that include one- and two-way paging infrastructure equipment and award winning two-way pagers with Always @ctive(TM) operation. Glenayre also delivers an array of Enhanced Services Platform products that include voice mail, fax messaging, voice-activated services, personal one-number services, and debit/prepaid calling card platforms to a variety of telecommunications service providers.
Glenayre's communication products currently operate in more than 100 countries. Glenayre is headquartered in Charlotte, North Carolina. For more information on Glenayre, its products, and services, visit www.glenayre.com .
This news release contains statements that may be forward looking within the meaning of applicable securities laws. The statements may include projections regarding future earnings results, and are based upon the company's current expectations and assumptions, which are subject to a number of risks and uncertainties. Factors that could cause actual results to differ are discussed in the company's most recently filed Form 10-K. These factors may include: potential decline in the paging infrastructure market; effective convergence of technologies; potential market changes resulting from rapid technological advances; growth of two-way interactive paging market; competition; variability of quarterly results; volatility of the company's stock price; limits on protection of proprietary technologies; potential changes in government regulation; financing customer purchases for development of the two-way communications market; international business risks; and the continuation and expansion of strategic alliances and partnerships.
ReFLEX is a registered trademark of Motorola Inc.
Solutions for an @ctive World is a trademark of Glenayre
Always @ctive is a trademark of Glenayre
- Tables to follow -
Glenayre Technologies Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
First Quarter Ended
3/31/00 3/31/99
Net Sales $58,656 $61,311
Cost of Sales 27,516 33,132
Selling, General & Administrative 17,096 19,902
Research & Development 8,779 10,500
Depreciation & Amortization 5,038 8,289
Adjustment to Loss on Sale of Business (524) --
Income (Loss) from Operations 751 (10,512)
Interest Income, Net 1,279 2,388
Other Income (Expense), Net 5 37
Income (Loss) from Continuing Operations
Before Income Taxes 2,035 (8,087)
Provision (Benefit) for Income Taxes 910 (6,192)
Income (Loss) from Continuing Operations 1,125 (1,895)
Income from Discontinued
Operations (Net of Income Tax) -- 298
Net Income (Loss) $1,125 $(1,597)
Net Income (Loss) per Common Share:
Continuing Operations $0.02 $ (0.03)
Discontinued Operations -- 0.00
$0.02 $ (0.03)
Number of Shares used to Compute
per Share Data 66,990 62,116
BALANCE SHEET DATA
(In thousands)
(Unaudited)
3/31/00 12/31/99
Cash $96,356 $83,868
Working Capital 177,854 158,035
Total Assets 413,832 413,558
Stockholders' Equity 349,228 335,478
NET SALES BREAKOUT
(In thousands)
(Unaudited)
By Business Segment:
Q1 00 Q1 99
Wireless Messaging
U.S. $16,442 $24,612
International 14,049 20,592
Subtotal 30,491 45,204
Enhanced Services Platform
U.S. 19,056 9,397
International 9,109 6,710
Subtotal 28,165 16,107
Totals $58,656 $61,311
SOURCE: Glenayre Technologies, Inc.
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