AFCI ($22.50 -$26) P/E 10 excedes expectations , upgrade
PETALUMA, Calif., July 26 /PRNewswire/ -- Advanced Fibre Communications®, Inc. (AFC®) (Nasdaq: AFCI - news), a leader in multiservice broadband solutions for the telecommunications industry, today announced financial results for the second quarter ended June 30, 2001. Revenues for the quarter were $78,609,000, compared with $101,232,000 for the second quarter of 2000. For the first six months of 2001, revenues totaled $160,820,000, compared with $186,651,000 in the first six months of 2000.
Net income for the second quarter of 2001 was $7,864,000 or $.09 earnings per share (diluted). Net income included an $8,180,000 unrealized gain on trading securities. Without this non-operating item and the associated tax effect, the net income would have been $2,793,000 or $.03 earnings per share. Net income for the second quarter of 2000 was $9,313,000 or $.11 earnings per share (diluted). Net income included non-recurring charges, in conjunction with the acquisition of GVN Technologies, Inc., of $1,062,000. Without these charges, net income for the second quarter of 2000 would have been $10,014,000 or $.12 earnings per share (diluted).
Net income for the first half of 2001 was $157,815,000 or $1.89 earnings per share (diluted). Excluding the non-operating effect of our implementation of Statement of Financial Accounting Standards No. 133 (SFAS 133) and the unrealized gains on trading securities, the net loss would have been $2,572,000 or $.03 loss per share (diluted). Net income for the first half of 2000 was $37,684,000 or $.44 earnings per share (diluted). Excluding non-recurring acquisition charges and a gain from Marconi Communications Inc. (Nasdaq: MONI - news) as part of a settlement of litigation and the associated tax effect, net income would have been $.20 earnings per share (diluted) for the first half of 2000.
AFC President and Chief Executive Officer John Schofield commented: ``Although our sector has been hit by a slowdown in capital spending due to a deteriorating economic environment, I have seen signs of encouragement for Advanced Fibre Communications. Orders from our traditional customers, the small and medium-sized independent operating companies, showed year over year growth during the quarter.
``Just as important, after a very slow first quarter, we saw some signs of progress within our large incumbent local exchange carrier customers, as some of these accounts began to order our products at an increasing rate. This leads me to believe that our traditional digital loop carrier business in North America is stabilizing as we experienced improving demand for our products.
``It is too early to tell if we are through the worst of the slowdown that impacted AFC in the first half of this year, but I am cautiously optimistic. During the quarter we introduced our newest product release, AccessMAX(TM) System 8, to very positive customer reactions. With this new release, I think we are well positioned to be the supplier of choice for service providers as they bring advanced broadband services such as Voice over DSL and Video over ADSL to the edge of the network. I remain convinced that broadband access represents a huge market opportunity for our company.
``Our balance sheet continues to be a source of strength, with approximately $894 million dollars in cash and securities on a pre-tax basis. As I said last quarter, we are diligently controlling costs for the short term, while ensuring our products and technology remain capable of delivering the legacy voice services demanded by carriers today, and a seamless, cost-effective transition to a packet-switched data network of the future.
``We have begun to execute our plan to deliver equipment to a small number of very large, well-financed ILECs in North America, while at the same time retaining our leading position as the access supplier of choice to the smaller IOC market in North America.''
About AFC
Headquartered in Petaluma, Calif., Advanced Fibre Communications, Inc. is an industry-leading designer and manufacturer of broadband access solutions for the local loop. With a customer base of more than 800 service providers worldwide, ranging from major incumbents to independent operators and international PTTs, AFC continues to build and support the world's evolving high-speed, next-generation access network architecture.
AFC's OmniMAX(TM) portfolio consists of integrated multiservice access platforms (IMAPs), integrated access devices (IADs), network element management systems, and environmentally hardened outside plant cabinets and technologies. AFC's comprehensive family of OmniMAX products can be quickly and cost-effectively deployed by either domestic or international service providers to build next-generation access networks or to upgrade legacy access networks for delivering additional voice and emerging broadband services.
Except for historical information contained in this press release, the foregoing contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated by such forward-looking statements based on a variety of risks and uncertainties, including the risks and uncertainties relating to AFC's continued success at large accounts, the continued financial strength and stability of our customers, growth in demand for our broadband services, our ability to successfully reduce and manage expenses, competition, the successful development and market acceptance of AFC's new products and features, and a downturn in the telecommunications industry. We undertake no obligation to revise or update these forward-looking statements to reflect events or circumstances after today or to reflect the occurrence of unanticipated events. Information about potential factors that could affect our financial results is included in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which have been filed with the Securities and Exchange Commission.
Advanced Fibre Communications, AFC, the AFC logo, and the UMC1000 are registered trademarks of Advanced Fibre Communications, Inc. OmniMAX, AccessMAX, EMAX, EMAXplus, DMAX, DataMAX, TransMAX, PremMAX, EdgeAccess ATM, ATLAS, and Panorama are trademarks of Advanced Fibre Communications, Inc. Copyright 2001, Advanced Fibre Communications, Inc. All rights reserved. Any other trademarks are the property of their respective owners.
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