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Glenayre Technologies Reports 2nd Quarter 2000 Earnings Glenayre Reports 2 Cents
Net Income - Exceeding Analyst Expectations for Fourth Consecutive Quarter
Glenayre Reports Highest Operating Income and EBITDA Since 3Q98 Enhanced
Services Platform Products Continue to be Strong Growth Segment for Glenayre
CHARLOTTE, N 0, 2000 /PRNewswire via COMTEX/ -- Glenayre Technologies Inc.
(Nasdaq: GEMS) today announced results for the second quarter of fiscal year
2000, ending on June 30, 2000. Results showed continued profitability with $0.02
per share net income, exceeding First Call analyst estimates for the fourth
consecutive quarter.
Glenayre's net sales for the second quarter 2000 totaled $56.7 million, compared
to $53.5 million for the same quarter last year - an increase of 6 percent.
Enhanced Services Platform (ESP) products generated record revenues for the
third consecutive quarter, with net sales for the second quarter 2000 of $28.9
million compared to $21.2 million reported in the second quarter 1999, an
increase of 36 percent. Wireless messaging sales decreased by 14 percent to
$27.7 million in comparison to the second quarter last year.
Income from operations improved to $1.1 million in the second quarter as
compared to a ($91.9) million loss for the second quarter last year, and to a
positive $0.8 million in the first quarter 2000. Excluding restructuring and
one-time charges, income from operations improved to $0.9 million in the second
quarter as compared to a loss of ($13.6) million at this time last year and to a
($0.1) million loss in the first quarter 2000. The improvement was primarily the
result of increased gross profit margins due to a higher revenue mix of Enhanced
Services Platform products and a decrease in expenses resulting from previously
announced cost reduction programs. Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA) was a positive $6.2 million for the second quarter
2000 as compared to a negative ($83.8) million as reported in the second quarter
1999 and a positive $5.8 million in the first quarter 2000. Excluding
restructuring and one-time charges, EBITDA for the second quarter 2000, the
second quarter 1999, and the first quarter 2000, was $6.0 million, negative
($5.4) million, and $5.0 million, respectively. Income per share from continuing
operations for the second quarter 2000 was a positive $0.02 cents per share as
compared to a loss of ($0.99) last year and a positive $0.02 cents per share in
the first quarter 2000. Excluding restructuring and one-time charges, second
quarter 2000 results are $0.19 cents per share better year over year, and a
$0.01 cent per share improvement sequentially. The results were $0.02 cents
better than the $0.00 cent income per share analysts estimated for this quarter.
"I am pleased with the second quarter 2000 results," stated Bert Klein, Chief
Financial Officer of Glenayre. "Although consistent with the seasonal trend over
the last couple of years of lower second quarter revenue as compared to first
quarter revenue, Glenayre has shown strong bottom line results, continuing to
produce profits ahead of schedule and beating First Call estimates for the
quarter. These results are due to the restructuring and repositioning program
initiated by Eric Doggett and from a tremendous amount of hard work by all
Glenayre employees."
Eric Doggett, President and Chief Executive Officer of Glenayre stated,
"Obviously we are pleased with the results and the new Glenayre's four quarter
track record of execution and predictability in achieving them. The main event
for the second quarter has been to grow our backlog in anticipation of strong
second half revenue growth. In this we have succeeded, with the highest book to
bill ratio Glenayre has seen in eight quarters, and a backlog that has grown
more than 50 percent, both sequentially and year over year. We have seen
tremendous strength in our Enhanced Services Platform products and continuing
order growth in the ReFLEX(TM) wireless device and infrastructure business.
Sales in the wireless products area were a little lower than originally
anticipated, mainly driven by the fact that most of the US two-way operators are
planning their 'hard' two-way market launches for the third quarter. This is
supported by the fact that in the second quarter we booked major orders for both
devices and infrastructure for sales in the second half of 2000."
In the second quarter, Glenayre made expansions and investments into new markets
for the company's Enhanced Services Platform. Some key initiatives in this area
included the Company entering into a stock purchase agreement to acquire 6.5
percent investment in Multi-Link Telecommunications, a provider of integrated
voice messaging to customers across the United States, and a distribution
agreement with Great Dragon Information Technology in China. Additionally,
current ESP customers both domestically and around the globe continue to be an
excellent source for growth, as they continue to expand and upgrade their
service infrastructure utilizing the Company's ESP products.
Significant developments in the paging infrastructure business have also
occurred over the past three months, including agreements with China Unicom's
Guoxin Paging Corporation and Beijing General Motion Communications Technology
to begin trials of the ReFLEX two-way messaging system in China. Also, Glenayre
is working with its distributor in Tokyo, Japan, NEC System Integration and
Construction, to build a $6.3 million wireless network for Tokyo WebLink to
serve subscribers in greater Tokyo.
The company expects to see growth in the wireless messaging area over the next
several quarters in part due to the launch of the @ctiveLink two-way wireless
messaging module occurring in the third quarter. The module has generated
significant interest among end users, Wireless ASPs, carriers, as well as
content providers and application developers. Developers for the @ctiveLink
announced in June included Datalink.net, Notify Technology, OfficeDomain, PCS
Innovations, WirelessMD(TM) and w-trade Technologies and, in previous
announcements, the company had announced that Hidden Mind Technology, Aether
Systems, JP Systems and MobileSys were to develop applications and solutions for
the @ctiveLink. Additionally, the company signed an agreement with ChangJiang
Information Technology to develop two-way messaging applications for the
@ctiveLink and other two-way devices for the China market.
"The year 2000 has changed from a turnaround to a 'turned' around year for
Glenayre. We continue to see the company grow and build a strong financial
position -- with an excellent balance sheet, over $104 million in cash, no debt,
and operations that continue to generate cash. Just as importantly, we have
rounded out our executive team with the additions of Bert Klein as Chief
Financial Officer and Senior Vice President, Operations; Jim Kelly as Chief
Marketing Officer and Senior Vice President, Marketing and Business Development;
and Wayne Chester as Senior Vice President, Wireless Products. As previously
announced our largest investor sought and received approval from our Board of
Directors to purchase up to 20 percent of outstanding shares of Glenayre common
stock," Doggett stated. "As I look to the domestic and global marketplace for
Glenayre, I believe growth for our ESP products will continue to be strong and
there will be very exciting opportunities for our wireless messaging products.
Late last year I indicated that 2000 would be the year Glenayre transitioned
back to a growth mode, with a total annual 2000 over 1999 revenue growth
opportunity of approximately 13 percent. With two quarters under our belt and
excellent visibility, I am confident that we have the opportunity to achieve
this. This would provide us a great springboard for even more rapid growth in
2001."
A teleconference regarding Glenayre's second quarter earnings will be held
Tuesday, July 25, 2000, at 8:30 a.m. Eastern Time. To listen to the call, please
dial 719-457-2625. The conference call also will be simulcast on
www.glenayre.com. Audio replay of the call will be available for 1 week from
July 25, 2000, by calling 719-457-0820 and entering access code #824182.
About Glenayre
For more than 35 years, Glenayre has developed and provided leading-edge
personal communication systems for the global market. We are focused on
delivering our Solutions for an @ctive World(TM) portfolio, leveraging core
competencies in the converging sectors of the wireless Internet and unified
messaging. Our wireless messaging products and systems include one- and two-way
paging infrastructure equipment; award-winning Always @ctive(TM) two-way pagers;
an array of Enhanced Services Platform products featuring voice mail, fax
messaging, voice-activated services, personal one-number services; and
debit/prepaid calling card platforms. Glenayre Technologies, Inc., headquartered
in Charlotte, North Carolina, has 1,300 employees located in 14 countries with
1999 net sales exceeding $238 million.
For more information on Glenayre, its products, and services, visit
www.glenayre.com .
Glenayre, the Glenayre logo, Solutions for an @ctive World, the Solutions for an
@ctive World logo, Always @ctive, AccessLink and @ctiveLink are trademarks of
Glenayre Electronics, Inc.
ReFLEX is a trademark of Motorola, Inc.
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.
GLENAYRE TECHNOLOGIES INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Second Quarter Ended
6/30/00 6/30/99
Net Sales $56,672 $53,477
Cost of Sales 22,893 33,909
Selling, General & Administrative 17,686 19,927
Provision for doubtful receivables 342 64,855
Research & Development 9,516 10,471
Depreciation & Amortization 5,095 8,129
Unrealized loss on subordinated notes -- 8,100
Income (Loss) from Operations 1,140 (91,914)
Interest Income, Net 1,703 907
Other Income (Expense), Net -- (496)
Income (Loss) from Continuing
Operations Before Income Taxes 2,843 (91,503)
Provision (Benefit) for Income Taxes 1,355 (29,747)
Income (Loss) from Continuing
Operations 1,488 (61,756)
Income from Discontinued Operations
(Net of Income Tax) -- 415
Net Income (Loss) $1,488 ($61,341)
Net Income (Loss) per Common Share:
Continuing Operations $0.02 ($0.99)
Discontinued Operations $0.00 $0.00
$0.02 ($0.99)
Number of Shares used to Compute
per Share Data 67,046 62,168
GLENAYRE TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
6/30/00 12/31/99
ASSETS
Current Assets:
Cash and cash equivalents $96,759 $73,513
Restricted cash 7,286 10,355
Accounts receivable, net 87,089 88,736
Notes receivable 2,383 7,083
Inventories 24,383 28,130
Deferred income taxes 15,790 16,668
Prepaid expenses and
other current assets 6,041 4,249
Total current assets 239,731 228,734
Notes receivable, net 1,781 4,707
Property, plant and equipment, net 84,131 88,654
Goodwill 46,655 47,999
Deferred income taxes 40,286 40,507
Other assets 2,970 2,957
TOTAL ASSETS $415,554 $413,558
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $16,317 $18,073
Accrued liabilities 40,445 52,534
Other current liabilities 81 92
Total current liabilities 56,843 70,699
Other liabilities 7,290 7,381
Stockholders' Equity:
Preferred stock, $.01 par value;
5,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, $.02 par value;
authorized: 200,000,000 shares;
outstanding: June 30, 2000 - 64,328,482
shares; December 31, 1999 -
62,430,153 shares 1,286 1,248
Contributed capital 358,421 345,097
Accumulated deficit (8,254) (10,867)
Total stockholders' equity 351,421 335,478
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $415,554 $413,558
NET SALES BREAKOUT
(In thousands)
(Unaudited)
By Business Segment: Q2 00 Q2 99
Wireless Messaging
U.S. $14,596 $15,035
International 13,151 17,283
Subtotal 27,747 32,318
Enhanced Services Platform
U.S. 16,752 11,698
International 12,173 9,461
Subtotal 28,925 21,159
Totals $56,672 $53,477
SOURCE Glenayre Technologies Inc.
CONTACT: Robbin Moore, Manager - Investor Relations of Glenayre
Technologies, 704-553-0038
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 111723
URL: glenayre.com
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