Turnstone Systems Reports Third Quarter Results
Third Quarter Revenues Grew to $56.2 Million; Earnings per Share of $0.19
SANTA CLARA, Calif., Oct 17, 2000 /PRNewswire via COMTEX/ -- Turnstone Systems, Inc. (Nasdaq: TSTN chart, msgs), a leading provider of loop management hardware and software products that enable local exchange carriers to rapidly deploy and efficiently maintain digital subscriber line (DSL) services, today announced financial results for the quarter ending September 30, 2000.
(Photo:http://www.newscom.com/cgi-bin/prnh/20000327/TSTNLOGO )
Third quarter revenues increased to $56.2 million, from $9.0 million in the same period a year earlier, an increase of 524 percent. Net income for the third quarter increased to $12.8 million, or $0.19 per diluted share based on 66.6 million weighted average shares outstanding, compared to a net income of $1.0 million or $0.02 per diluted share for the same period a year earlier, an 850% increase in earnings per share. Gross profit for the quarter was $32.9 million and gross profit margin was 58.5%. Operating profit was $19.9 million or 35.4% of net revenue.
"We are very pleased with our performance for the third quarter of 2000," said Rick Tinsley, President and Chief Executive Officer. "We continue to enjoy healthy market leadership as a growing number of DSL service providers around the world standardize on Turnstone for comprehensive loop management solutions. Our competitive position remains strong and we believe we have significant opportunities with customers in multiple market segments as deregulation of the local loop continues to prompt investments in loop management systems in an increasing number of countries around the world. Our international customers accounted for approximately 19% of our revenues for the quarter."
During the quarter the company completed a follow-on offering of its common stock. Net proceeds to the company from the offering totaled approximately $166.3 million and as of September 30, 2000, the company had cash and short-term investments of $285.6 million. The company also completed a 2-for-1 split of its common stock during the quarter. All per share amounts have been adjusted to account for the split.
Conference Call
Turnstone will hold a conference call to discuss third quarter results at 5:00 p.m. EST today. Interested parties may listen to the conference call live either by telephone or on the Internet.
TO LISTEN BY TELEPHONE: Dial 212-346-6404 and enter reservation number 16487926. In addition to the live call, a replay of the conference call will be available one hour after the call concludes by dialing 800-633-8284 and entering reservation number 16487926.
TO LISTEN ON THE INTERNET: Go to Turnstone's web site, located at www.turnstone.com, and click on the "Live Webcast" button. Allow at least 15 minutes before the conference call to register, download and install any necessary audio software.
About Turnstone Systems
Turnstone Systems, Inc. is a leading provider of hardware and software products that enable local exchange carriers to rapidly deploy and efficiently maintain DSL services. Turnstone's flagship product, the Copper CrossConnect(TM) CX100, is a loop management platform that is deployed in central offices to enable automation and remote control of physical layer tasks related to DSL installation, qualification and maintenance. Turnstone's CrossWorks(TM) software enables service providers to easily integrate these loop management functions into back-office Operational Support Systems (OSS), enhancing their ability to efficiently scale their DSL service offerings to meet ever-increasing demand. Turnstone is based in Santa Clara, California. For more information about Turnstone, visit www.turnstone.com, email info@turnstone.com or phone the toll-free number 877.8.COPPER.
TURNSTONE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
The Three Months Ended The Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Net revenues $56,227 $9,033 $120,387 $14,704
Cost of revenues 23,356 3,834 49,188 6,920
Gross profit 32,871 5,199 71,199 7,784
Operating expenses:
Research and
development 5,884 1,756 12,234 3,609
Sales and marketing 3,495 1,100 9,208 2,429
General and
administrative 1,643 444 3,539 943
Amortization of
intangible assets 231 -- 231 --
Amortization of
deferred stock
compensation 1,734 877 5,548 2,160
Total operating
expenses 12,987 4,177 30,760 9,141
Operating income
(loss) 19,884 1,022 40,439 (1,357)
Interest income
(expense) and
other, net 1,446 29 3,839 112
Income (loss) before
income tax 21,330 1,051 44,278 (1,245)
Income tax expense 8,515 63 17,826 63
Net income (loss) $12,815 $988 $26,452 $(1,308)
Basic net earnings
(loss) per share
of common stock $.24 $.11 $.56 $(.17)
Diluted net earnings
(loss) per share
of common stock $.19 $.02 $.41 $(.17)
Weighted-average
shares of common
stock outstanding
used in computing
basic net earnings
(loss) per share 53,559 9,399 47,276 7,672
Weighted-average
shares of common
stock outstanding
used in
computing diluted
net earnings (loss)
per share 66,647 55,400 65,110 7,672
TURNSTONE SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, December 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $229,231 $8,063
Short-term investments 56,350 --
Accounts receivable, net 18,914 6,439
Inventory 20,203 2,939
Prepaid expenses and other current assets 3,144 599
Total current assets 327,842 18,040
Property and equipment, net 3,425 1,085
Restricted cash 3,639 --
Intangible assets 6,136 --
Other assets 207 132
Total assets 341,249 19,257
Liabilities and stockholders' equity
Current liabilities:
Current obligations under capital leases 225 229
Accounts payable 11,871 783
Accrued compensation and benefits 2,853 920
Income tax payable 11,113 --
Customer deposits 3,795 1,328
Other current liabilities and accrued expenses 3,557 1,679
Deferred revenue 3,301 2,132
Total current liabilities 36,715 7,071
Long-term obligations under capital leases,
net of current portion 67 260
Other long-term liabilities 2,352 35
Total liabilities 39,134 7,366
Stockholders' equity:
Convertible preferred stock -- 15
Common stock, $.001 stated value,
200,000 shares authorized;
65,072 and 22,814 shares issued and
outstanding at September 30, 2000 and
December 31, 1999, respectively 65 22
Additional paid-in capital 289,074 26,536
Deferred stock compensation (8,487) (9,701)
Accumulated other comprehensive loss (8) --
Retained earnings (accumulated deficit) 21,471 (4,981)
Total stockholders' equity 302,115 11,891
Total liabilities and stockholders' equity $341,249 $19,257
Source: Turnstone Systems, Inc.
Contact:
Terry Schmid, Chief Financial Officer, 408-907-1638 or
ir@turnstone.com, or Holly Shaw, Investor Relations, 408-907-1637 or
hshaw@turnstone.com, both of
Turnstone Systems, Inc.
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