8/17...DITC...Announces Fiscal 2001 Q1 Results
Revenues Increase 345% over Q1 2000; Pro Forma Earnings Per Share Reach $0.47
MOUNTAIN VIEW, Calif., Aug. 17 /PRNewswire/ -- Ditech Communications Corporation (Nasdaq: DITC - news) today reported results for its first quarter of fiscal year 2001. Revenues for the first quarter ended July 31, 2000 were $43.5 million, up 345% over revenues of $9.8 million in the same quarter last year.
Ditech's pro forma net income available to common shareholders for the first quarter of fiscal 2001 was $14.2 million, up from $940,000 in the same quarter last year. Pro forma earnings per share for the first quarter was $0.47 compared to $0.04 for the same quarter last year.(1) Ditech's pro forma financial results do not include the impact of non-cash charges related to M&A activity, including purchased research and development, goodwill and other costs.
Ditech's actual net income available to common shareholders for the first quarter of fiscal 2001 was $11.7 million compared to $940,000 in the same quarter last year. Actual earnings per share for the first quarter were $0.39 per share compared to $0.04 for the same quarter last year. Gross margins were 70.1 percent for the first quarter compared to 57.6 percent for the same quarter last year.
``Our execution was excellent this quarter while we simultaneously continued to build the infrastructure required for our bold move into the core optical networking market,'' said Tim Montgomery, Ditech's President and CEO. ``Our leading-edge Broadband Echo Canceller continued to drive strong sales in our voice business this quarter, providing the foundation for our high gross margins. We added five new echo cancellation customers, including three new customers in the wireless market. We also continued our technology leadership, introducing our new STS-1 Echo Canceller, the first echo canceller with an interface fast enough to plug into an optical network. In addition, we added three new customers in our optical business, and we introduced the Quasar, a new type of optical amplifier which will allow us to address new markets and customers.''
Continued Montgomery, ``While this quarter's results were gratifying, we are especially proud of the execution of our longer term strategic plan to become a leading player in the core optical networking market. To that end, we successfully completed the acquisition of Atmosphere Networks. With this acquisition, we doubled our optical engineering staff, adding critical expertise and critical mass to our drive for a leadership position in the optical networking business.''
Ditech Communications Corporation
Ditech Communications Corporation is a global telecommunications equipment supplier for voice and data networks. Ditech's voice products are high-capacity echo cancellers that utilize advanced software and digital signal processor (DSP) technology. This unique combination of software and hardware allows Ditech to deliver Voice Quality of Service (VQoS(TM)), a robust and cost-effective solution for voice enhancement and echo cancellation. Ditech's products for data networks provide building blocks for high-speed, high-capacity backbone networks. These products are based on wavelength division multiplexing (WDM), a technology that enables many wavelengths of light, each carrying multiple gigabits of information, to be carried on one fiber optic connection. With Ditech's WDM products, network equipment companies and service providers can quickly and cost-effectively expand their network capacity to meet the growing demands of the Internet age without incurring the vast time and expense of laying new fiber optic cable. Ditech (DITC) is listed on the Nasdaq National Market and is headquartered in Mountain View, California (Web site: ditechcom.com ).
Forward-Looking Statements
This press release contains forward-looking statements regarding Ditech's expectations regarding its expansion into the optical market. Actual results could differ materially as a result of unanticipated factors and events, including: the risk that Ditech may experience delays in developing its new optical products due to unforeseen technical difficulties; the risk that Ditech may not be successful integrating Atmosphere Networks personnel into its business, which would hamper its ability to develop new optical products; the risk that the market will not accept Ditech's new optical products due to a number of reasons, including unwillingness to convert to new technology; the risk that Ditech's competitors will develop optical products that compete favorably with Ditech's new optical products; the risk that Ditech has a limited number of customers, the loss of any one which could cause its revenues to decrease materially; as well as those detailed in the ``Risk Factors'' section of Ditech's Form 10-K for the year ended April 30, 2000 (filed July 31, 2000 with the Securities and Exchange Commission).
Footnotes
(1) Diluted earnings per share is based on weighted average shares of 30,093,000 and 22,503,000 shares in fiscal 2000 and 1999, respectively.
Ditech Communications Corporation
Proforma Statements of Operations
For the Three Months Ended July 31, 2000 and 1999
(in thousands, except per share data)
Three Months Ended July 31,
2000 1999
(unaudited)
Revenue $43,529 $9,771
Cost of Goods Sold 13,043 4,139
Gross Profit 30,486 5,632
Operating Expenses
Sales and Marketing 2,630 1,735
Research and Development 3,167 1,141
General and Administration 1,549 858
Total Operating Expenses 7,346 3,734
Income from Operations 23,140 1,898
Other Income (Expense), Net 1,149 (109)
Income Before Provision for Income Taxes 24,289 1,789
Provision for Income Taxes 10,080 750
Net Income 14,209 1,039
Accretion of Mandatorily Redeemable
Preferred Stock to Redemption Value -- 99
Net Income Attributable to Common
Stockholders $14,209 $940
Net Income per Share Attributable to
Common Stockholders
Basic $0.52 $0.06
Diluted $0.47 $0.04
Number of Shares Used in Per
Share Calculations
Basic 27,582 16,719
Diluted 30,093 22,503
Note: The above proforma statements of operations exclude the impact of the noncash charges associated with the purchases of Telinnovation, which was completed on February 1, 2000 and Atmosphere Networks, which was completed on July 25, 2000. The noncash charges excluded are ``Amortization of Goodwill and Purchased Technology'' and ``Amortization of Stock Compensation'' and the related tax impact.
Ditech Communications Corporation
Statements of Operations
For the Three Months Ended July 31, 2000 and 1999
(in thousands, except per share data)
Three Months Ended July 31,
2000 1999
(unaudited)
Revenue $43,529 $9,771
Cost of Goods Sold 13,043 4,139
Gross Profit 30,486 5,632
Operating Expenses
Sales and Marketing 2,630 1,735
Research and Development 3,167 1,141
General and Administration 1,549 858
Amortization of Goodwill
and Purchased Technology 2,154 --
Amortization of Stock Compensation 1,938 --
Total Operating Expenses 11,438 3,734
Income from Operations 19,048 1,898
Other Income (Expense), Net 1,149 (109)
Income Before Provision for Income Taxes 20,197 1,789
Provision for Income Taxes 8,460 750
Net Income 11,737 1,039
Accretion of Mandatorily Redeemable
Preferred Stock to Redemption Value -- 99
Net Income Attributable to Common
Stockholders $11,737 $940
Net Income per Share Attributable
to Common Stockholders
Basic $0.43 $0.06
Diluted $0.39 $0.04
Number of Shares Used in Per Share
Calculations
Basic 27,582 16,719
Diluted 30,093 22,503
Ditech Communications Corporation
Condensed Balance Sheets
(in thousands)
July 31, April 30,
2000 2000
(unaudited)
Assets
Cash and Cash Equivalents $121,689 $88,616
Accounts Receivable, net 19,978 20,349
Inventories, net 7,443 6,596
Income Taxes Receivable -- 1,412
Deferred Income taxes 2,288 1,839
Other Current Assets 1,213 352
Total Current Assets 152,611 119,164
Property, Plant and Equipment, net 4,936 2,680
Other Assets 122,996 43,308
Total Assets $280,543 $165,152
Liabilities
Accounts Payable $7,463 $5,201
Accrued Expenses 15,584 4,228
Income Taxes Payable 4,898 --
Deferred Revenue 2,260 2,074
Note Payable, Current Portion 2,151 --
Obligations under Capital Lease,
Current Portion 2,099 55
Total Current Liabilities 34,455 11,558
Obligations under Capital Lease,
Net of Current Portion 12 21
Total Liabilities 34,467 11,579
Stockholders' Equity
Common Stock 252,326 171,147
Deferred Stock Compensation (22,350) (21,937)
Retained Earnings 16,100 4,363
Total Stockholders' Equity 246,076 153,573
Total Liabilities and Stockholders' Equity $280,543 $165,152
SOURCE: Ditech Communications Corporation |
