micheal m., Here is the way they wrote it up....
CNT Reports Record Revenue and Profits for the Third Quarter
Revenue of $46.2 Million Up 36 percent; SAN Product Revenues Up 63 percent; Operating Income Up 63 percent
MINNEAPOLIS, Nov 16, 2000 /PRNewswire via COMTEX/ -- CNT(R) (Nasdaq: CMNT chart, msgs) today reported financial results for the period ended October 31, 2000.
Record revenues of $46.2 million increased 36 percent from the third quarter of 1999. The company reported net income from continuing operations of $4.7 million, or $.17 per share, for the third quarter of 2000, excluding a one-time gain of $287,000 from the reversal of a restructuring accrual. The $4.7 million net income is an 80 percent increase compared to the prior-year quarter net income from continuing operations of $2.6 million, or $.10 per share. Net income for the third quarter of 2000, including discontinued operations and the one-time gain of $287,000, totaled $3.7 million, or $.13 per share, an increase of $1.0 million or 35 percent, from the comparable 1999 period.
For the first nine months of 2000, revenues totaled $129.1 million, an increase of $35.3 million, or 38 percent, from the same period last year. Net income from continuing operations, excluding the one-time gain of $287,000, totaled $10.6 million, or $.40 per share, up 106 percent compared to net income from continuing operations of $5.1 million, or $.20 per share, for the first nine months of 1999. Net income including discontinued operations and the one-time gain of $287,000, totaled $7.6 million, or $.28 per share, for the nine-month period, an increase of $356,000, or 5 percent, compared to the first nine months of 1999.
"Sales of storage area networking (SAN) products continued to grow at a rapid pace in the third quarter," said Thomas G. Hudson, chairman, president and chief executive officer of CNT. "We also saw a significant increase in our professional services business. These drivers fueled record revenue growth. In addition, we formally announced our intention to divest the Enterprise Integration Solutions Division. The decision allows us to clearly focus all of our resources on our storage networking business, and resulted in the classification of the Enterprise Integration Solutions Division as a discontinued operation.
"For the fiscal third quarter, sales of storage networking increased 63 percent to $24.9 million, compared to the third quarter of 1999, and 53 percent to $62.3 million for the first nine months of 2000, versus the year-ago period. Professional services revenue rose 111 percent to $2.3 million, from the third quarter of 1999, and $6.4 million, or 96 percent, for the first nine months of 2000 versus last year."
Hudson continued, "At the end of October, we announced the availability of our field-proven SAN services that enable customers to design and implement SANs quickly and cost-effectively using the best technologies. There is significant confusion today among customers about the best way to leverage a SAN. Our SAN services eliminates that confusion and provides customers with the ability to reap the business benefits of networked storage."
In other business highlights, EchoStar Communications/DISH Network recently selected CNT to provide SAN services and solutions to cost-effectively share and protect its storage and administrative resources. According to Hudson, "CNT presented EchoStar with a detailed, comprehensive plan for storage network design, proof-of-concept testing and implementation that enabled improved network protection and operating efficiency.
"CNT has years of real-world experience in the design and implementation of interoperable storage networks," said Hudson. "We firmly believe there is a real need in the marketplace for quality SAN implementation firms. We expect SAN services to be an area of significant growth for CNT in the future."
The company raised $110 million during the third quarter from the sale of 4.6 million shares of CNT common stock. Proceeds from the offering will allow CNT to invest in key storage networking and professional service markets, and pursue complementary product and business acquisitions.
In January 2000, CNT announced the change of its fiscal year-end from December 31 to January 31, effective in the first quarter of 2000. The quarterly analyses in this release compare August-September-October 2000 to July-August-September 1999.
Future Outlook
In line with current analyst expectations, CNT is in general agreement with the following outlook for the fourth quarter of 2000 and fiscal year 2001:
-- Through the end of 2001, CNT anticipates that storage networking product revenues should continue to grow at a rate of 50 percent to 70 percent (annually), and channel extension revenues will decline 10 percent to 20 percent (annually).
-- For the fourth quarter of 2000, revenue from continuing operations is expected to range from $49 million to $51 million.
Management also expects:
-- Revenue from continuing operations for fiscal year 2001 to be between $220 million and $225 million.
-- Gross margins should be in the range of 53 percent to 55 percent for the fourth quarter of 2000, and between 54 percent to 56 percent in 2001.
-- Operating margins are estimated in the range of 15 percent to 17 percent of revenue through fiscal 2001.
-- Earnings per share from continuing operations for the fourth quarter of 2000 is expected to range from $.20 to $.21 per share, and $.80 to $.85 per share in 2001.
Conference Call Information
CNT will be holding a conference call this afternoon, November 16, 2000, at 4:30 p.m. Central time to discuss the third quarter results. The call can be accessed via CNT's web site at cnt.com ; a replay of the call will be available on the web site for two days.
About CNT
CNT is a global specialist in storage networking solutions. CNT's expertise is our ability to connect to different servers, systems, and platforms -- across any distance -- with high availability, scalability, and reliability. The company's Enterprise Integration Solutions subsidiary provides software solutions for the EAI market, enabling companies to leverage their information assets and infrastructure while pursuing new e-business and customer relationship management (CRM) initiatives. For more information, visit CNT's web site at cnt.com , or call 763-268-6000.
For Additional Information, Contact:
Greg Barnum, VP of Finance & CFO Ann Castillo, Sr. Dir. of Marketing
763-268-6110, greg_barnum@cnt.com 763-268-6771, leann_castillo@cnt.com
Certain statements in this press release and in documents we have filed with the Securities and Exchange Commission, and oral statements made by or with the approval of our executive officers contain "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements about our anticipated receipt of orders and their impact on quarterly sales, business strategy, expectations regarding future revenue levels, gross margins, expenses, operating margins and earnings per share, timing of and plans for the introduction or phase-out of products or services, enhancements of existing products or services, plans for hiring additional personnel, entering into strategic partnerships, divestiture of the EIS subsidiary and other plans, objectives, expectations and intentions that are not historical fact.
The words "may," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential" or "continue" and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those expressed or implied by these forward-looking statements as a result of certain risk factors, including but not limited to (i) competitive factors, including pricing pressures; (ii) variability in quarterly sales; (iii) economic trends in various geographic markets; (iv) relationships with our strategic partners; (v) issues relating to implementation of SEC Staff Accounting Bulletin 101; (vi) unanticipated risks associated with introducing new products and features, including InVista; (vii) technological change affecting our products and (viii) other events and other important factors disclosed previously and from time to time in our filings with the U.S. Securities and Exchange Commission. In addition, there can be no assurance that a change in a fiscal year will enhance predictability of operating results, or that the divestiture of the EIS subsidiary can be completed on acceptable terms and conditions. We assume no obligation to update any forward-looking statements. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
CNT
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three months ended Nine months ended
October 31, September 30, October 31, September 30,
2000 1999 2000 1999
Revenue:
Product sales $33,239 $25,001 $92,279 $67,589
Service fees 12,959 9,078 36,867 26,227
Total revenue 46,198 34,079 129,146 93,816
Cost of revenue:
Cost of product sales 14,190 10,120 38,597 26,781
Cost of service fees 7,802 4,638 21,920 14,205
Total cost of
revenue 21,992 14,758 60,517 40,986
Gross profit 24,206 19,321 68,629 52,830
Operating expenses:
Sales and marketing 10,690 8,944 30,741 26,182
Engineering and
development 5,267 4,796 16,742 13,634
General and
administrative 2,020 1,761 6,329 5,228
Abandoned facility (287) -- (287) --
Total operating
expenses 17,690 15,501 53,525 45,044
Income from operations 6,516 3,820 15,104 7,786
Other income (expense): 731 100 952 (8)
Income before income
taxes 7,247 3,920 16,056 7,778
Provision for income
taxes 2,392 1,333 5,299 2,645
Income from continuing
operations 4,855 2,587 10,757 5,133
Income (loss) from
discontinued operations,
net of tax (1,150) 162 (3,169) 2,099
Net income $3,705 $2,749 $7,588 $7,232
Basic income (loss)
per share:
Continuing operations $.19 $.11 $.44 $.22
Discontinued operations $(.05) $.01 $(.13) $.09
Net income $.15 $.12 $.31 $.31
Shares 25,248 23,441 24,432 22,998
Diluted income (loss)
per share:
Continuing operations $.17 $.10 $.40 $.20
Discontinued operations $(.04) $.01 $(.12) $.08
Net Income $.13 $.11 $.28 $.28
Shares 27,858 25,707 26,735 25,552
CNT
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) (unaudited)
October 31, December 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $67,318 $16,184
Marketable securities 78,533 10,711
Receivables, net 35,925 29,517
Inventories 18,524 14,425
Net current assets of discontinued operations 7,511 5,089
Deferred tax asset 3,415 3,415
Other current assets 1,875 1,776
Total current assets 213,101 81,117
Property and equipment, net 23,296 17,529
Field support spares, net 4,097 3,879
Deferred tax asset 2,070 2,070
Goodwill and other intangibles, net 927 1,222
Net non-current assets of discontinued operations -- 4,645
Other assets 1,313 192
$244,804 $110,654
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $15,286 $11,408
Accrued liabilities 17,401 10,010
Deferred revenue 12,436 8,296
Current installments of obligations under
capital lease 1,307 688
Total current liabilities 46,430 30,402
Obligations under capital lease, less current
installments 2,028 1,780
Total liabilities 48,458 32,182
Shareholders' equity:
Undesignated preferred stock, authorized
965 shares; none issued and outstanding -- --
Series A Junior participating preferred stock,
authorized 35 shares, none issued & outstanding -- --
Common stock, $.01 par value; authorized
100,000 shares, issued and outstanding
29,014 at October 31, 2000 and
23,792 at December 31, 1999 290 238
Additional paid-in capital 184,176 68,927
Unearned compensation (1,453) (838)
Retained earnings 14,759 10,796
Accumulated other comprehensive income-
foreign currency translation (1,426) (651)
Total shareholders' equity 196,346 78,472
$244,804 $110,654
CNT
ENTERPRISE INTEGRATION SOLUTIONS DIVISION
STATEMENT OF OPERATIONS OF DISCONTINUED OPERATIONS
(in thousands, except per share data) (unaudited)
Three months ended Nine months ended
October 31, September 30 October 31, September 30,
2000 1999 2000 1999
Revenue:
Product sales $3,227 $4,164 $7,852 $13,710
Service fees 1,447 2,826 4,887 8,312
Total revenue 4,674 6,990 12,739 22,022
Cost of revenue:
Cost of product sales 1,052 476 2,019 1,478
Cost of service fees 1,126 2,184 3,661 5,626
Total cost of revenue 2,178 2,660 5,680 7,104
Gross profit 2,496 4,330 7,059 14,918
Operating expenses:
Sales and marketing 3,039 2,626 8,790 7,830
Engineering and
development 1,174 1,459 4,210 4,576
Total operating
expenses 4,213 4,085 13,000 12,406
Income (loss) from
discontinued
operations (1,717) 245 (5,941) 2,512
Other income -- -- 1,210 667
Income (loss) from
discontinued operations
before income taxes (1,717) 245 (4,731) 3,179
Benefit (provision)
for income taxes 567 (83) 1,562 (1,080)
Income (loss) from
discontinued
operations,
net of tax $(1,150) $162 $(3,169) $2,099
Source: Computer Network Technology
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