TELM tops estimates Tuesday April 30, 4:11 pm Eastern Time
Press Release
SOURCE: Tellium
Tellium Reports First Quarter 2002 Results
Tellium's EPS of $0.02 on a Pro Forma Cash Basis Exceeds Analysts' Expectations
OCEANPORT, N.J.--(BUSINESS WIRE)--April 30, 2002--Tellium, Inc. (Nasdaq:TELM - news):
First Quarter Highlights
Earnings per share on a pro forma cash basis were $0.02 - exceeds First Call consensus of $0.01
First quarter revenues were $54.1 million - up 8 percent sequentially
Gross margins before non-cash charges increased to $26.1 million - 48 percent of revenues, up from 46 percent in the fourth quarter of 2001
Cash position of $209 million - only $9.9 million decrease in cash position for the quarter
Tellium's upgrade to the StarNet Software Suite(TM) provides true shared mesh protection at SONET/SDH ring-speeds
Tellium, Inc. (Nasdaq: TELM - news), today reported its results for the first quarter ended March 31, 2002. Revenues were $54.1 million during the quarter, compared with $15.6 million for the same period last year, or an increase of $38.5 million.
On a pro forma cash basis (before non-cash charges related to equity issuances, stock-based compensation expense, depreciation, and amortization), net income was $1.9 million, or $0.02 per fully diluted share, compared to a net loss of $19.8 million or a loss of $0.14 per fully diluted share during the first quarter of 2001. Including non-cash charges, the company's net loss for the first quarter was $28.5 million, compared with $49.8 million in the same quarter last year.
Operating income on a pro forma cash basis was $1.0 million, compared to an operating loss of $22.5 million on a pro forma cash basis during the first quarter of 2001. Including non-cash charges, the operating loss was $29.3 million during the first quarter of 2002 compared with a $52.5 million operating loss in the March quarter of 2001. Gross margins, on a pro forma cash basis rose to $26.1 million in the first quarter of 2002, or 48 percent of revenues. This compares with $6.3 million, or 40 percent of revenues, in the same quarter last year and continues a 200 basis point improvement for the fourth consecutive quarter. Including non-cash charges, gross margins were $15.5 million during the first quarter of 2002 compared with gross margins of $118,000 in the same quarter a year ago.
"A strong financial foundation is the key to meeting the challenges of the telecommunications market today and in the future. During the first quarter we continued to demonstrate that strength as a company as we delivered financial results in line with or exceeding analysts' expectations," said Harry Carr, chairman of the board and chief executive officer of Tellium. "While the industry remains unsettled, we remain committed to delivering leading edge, first-to-market, next-generation technology. As carriers resume more significant spending we are confident they will join our current customers and choose Tellium for the core of their networks."
Live Webcast Discussing First Quarter 2002 Results
Tellium management will discuss the company's first quarter 2002 results with investors and analysts on Tuesday, April 30, 2002, at 5:00 p.m. EDT. A live audio webcast of this discussion will be available via Tellium's home page at www.tellium.com. A replay of the webcast will be available for approximately two weeks on the Investor Relations page of Tellium's web site at investor.tellium.com.
About Tellium
Tellium delivers high-speed, high-capacity, intelligent core optical solutions, that empower service providers around the world to create, run, control and optimize their networks. First in the world to provide in-service, intelligent optical switches, Tellium's Aurora Optical Switch(TM) family and the StarNet Software Suite(TM) together offer service providers a simple and cost-effective migration path to next-generation public networks.
For more information, visit Tellium's web site at www.tellium.com, or contact below.
Certain matters discussed in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on current expectations, forecasts and assumptions of the Company that involve risks and uncertainties. Forward-looking statements in this release, include, but are not limited to, Tellium's projected revenue growth, financial position, ability to meet the challenges of the telecommunications market, ability to attract customers, ability to deliver better, faster and more cost-effective products to the marketplace, and all other statements that are not purely historical. These forward-looking statements involve risks and uncertainties which could cause actual results to differ materially including, without limitation, the risk that (1) we continue to incur significant losses in the future; (2) we generate substantially all of our revenue from a limited number of customers; (3) we fail to develop new and enhanced products; (4) the selling prices of our products declines; (5) general economic conditions or conditions within our industry continue to worsen or improve more slowly than we expect; (6) we will not attract new customers;(7) we are unable to reach commercially-acceptable contract terms with new customers; (8) customers fail to place expected orders for our products; (9) errors or defects in our products are found only after full deployment in a customer's network; (10) our products are unable to operate within customer networks; (11) our products fail to meet contract specifications or industry standards that may emerge; (12) the optical switching market fails to develop as we expect; (13) we are unable to increase market awareness and sales of our products, and (14) we are unable to comply with government regulation.
These and other factors and other risks and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission, particularly the "Risk Factors" section of the annual report on Form 10-K filed on April 1, 2002. The forward-looking statements in this press release are only made as of this date, and the Company assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
Tellium, the Tellium logo, "Smarter, Faster Optical Networks", Aurora Optical Switch, StarNet Software Suite, and others are trademarks or registered trademarks of Tellium, Inc. in the United States and/or other countries. Other marks are the properties of their respective owners.
Tellium, Inc. Pro Forma(a) Consolidated Statement of Operations
(amounts in thousands, except per share data)
Three months ended
------------------------------------
3/31/01 3/31/02
----------- -----------
(unaudited) (unaudited)
REVENUE $ 15,635 $ 54,060
COST OF REVENUE 9,313 27,912
----------- -----------
Gross profit 6,322 26,148
----------- -----------
OPERATING EXPENSES:
Research and development 16,334 12,760
Sales and marketing 7,619 6,851
General and administrative 4,824 5,488
----------- -----------
Total operating expenses 28,777 25,099
----------- -----------
OPERATING (LOSS) INCOME (22,455) 1,049
----------- -----------
OTHER (EXPENSE) INCOME:
Other (expense) income (20) (56)
Interest income -net 2,697 858
----------- -----------
Total other income 2,677 802
----------- -----------
NET (LOSS) INCOME $ (19,778) $ 1,851
=========== ===========
BASIC AND DILUTED (LOSS) INCOME PER SHARE
Reported(b) $ (1.27) $ 0.02
Pro forma(c) (0.14) 0.02
=========== ===========
BASIC AND DILUTED
WEIGHTED AVERAGE SHARES OUTSTANDING
Reported(b) 15,555 106,911
Pro forma(c) 138,055 120,756
=========== ===========
Notes
(a) Excludes non-cash items including charges relating to equity
issuances, stock-based compensation expense, depreciation, and
amortization.
(b) Reflects number of shares calculated pursuant to generally
accepted accounting principles.
(c) Reflects number of shares including both shares outstanding
and shares issuable upon exercise of outstanding options and
warrants, pursuant to the treasury method.
Tellium, Inc. Reported Consolidated Statement of Operations
(amounts in thousands, except per share data)
Three months ended
--------------------------------------
3/31/01 3/31/02
----------- --------------
(unaudited) (unaudited)
REVENUE $ 15,635 $ 54,060
Non-cash charges relating
to equity issuances(a) 4,790 7,356
--------- -----------
REVENUE, net of non-cash charges
relating to equity issuances 10,845 46,704
COST OF REVENUE(a) 10,727 31,246
--------- -----------
Gross profit 118 15,458
--------- -----------
OPERATING EXPENSES:
Research and development,
excluding stock-based
compensation 16,647 13,966
Sales and marketing,
excluding stock-based
compensation 7,672 7,155
General and administrative,
excluding stock-based
compensation 5,815 7,619
Amortization of
intangible assets(a) 7,917 4,050
Stock-based compensation expense(a) 14,557 11,987
--------- -----------
Total operating expenses 52,608 44,777
--------- -----------
OPERATING (LOSS) (52,490) (29,319)
--------- -----------
OTHER EXPENSE (EXPENSE) INCOME:
Other (expense) income (20) (56)
Interest income - net 2,697 858
--------- -----------
Total other income 2,677 802
--------- -----------
NET (LOSS) $(49,813) $ (28,517)
========= ===========
BASIC AND DILUTED (LOSS) PER SHARE
Reported(b) $ (3.20) $ (0.27)
Pro forma(c) $ (0.36) $ (0.24)
========= ===========
BASIC AND DILUTED
WEIGHTED AVERAGE SHARES OUTSTANDING
Reported(b) 15,555 106,911
Pro forma(c) 138,055 120,756
========= ===========
STOCK-BASED COMPENSATION EXPENSE(a)
Cost of revenue $ 1,365 $ 1,453
Research and development 9,488 7,520
Sales and marketing 2,528 2,935
General and administrative 2,541 1,532
--------- -----------
Total stock-based
compensation expense $ 15,922 $ 13,440
========= ===========
DEPRECIATION(a)
Cost of revenue $ 49 $ 1,881
Research and development 313 1,206
Sales and marketing 53 304
General and administrative 991 2,131
--------- -----------
Total depreciation $ 1,406 $ 5,522
========= ===========
Notes
(a) Reflects lines not included in the pro forma consolidated
statement of operations.
(b) Reflects number of shares calculated pursuant to generally
accepted accounting principles.
(c) Reflects number of shares including both shares outstanding
and shares issuable upon exercise of outstanding options and
warrants, pursuant to the treasury method.
Tellium, Inc. Consolidated Balance Sheet
(amounts in thousands)
As of: 12/31/01 3/31/02
------------- ----------
ASSETS (audited) (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 218,708 $ 208,818
Accounts receivable, less
allowance for doubtful accounts 23,924 48,372
Inventories 52,398 40,389
Prepaid expenses and other
current assets 8,108 6,058
---------- ---------
Total current assets 303,138 303,637
Property and equipment - net 65,085 62,298
Deferred warrant 65,705 58,349
Intangible assets - net 60,200 56,150
Goodwill - net 58,434 58,434
Other assets 1,277 949
---------- ---------
TOTAL ASSETS $ 553,839 $ 539,817
========== =========
LIABILITIES, PREFERRED STOCK, AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 9,684 $ 10,838
Accrued expenses and other
current liabilities 39,777 39,025
Current portion of notes payable 602 425
Current portion of capital
lease obligations 96 88
Bank line of credit 8,000 8,000
---------- ---------
Total current liabilities 58,159 58,376
Long-term portion of notes payable 583 540
Long-term portion of capital
lease obligations 125 107
Other long-term liabilities 233 272
---------- ---------
TOTAL LIABILITIES 59,100 59,295
---------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
900,000 shares authorized,
114,495 issued and 112,447
outstanding as of 12/31/01,
114,987 issued and 112,537
outstanding as of 3/31/02 115 115
Additional paid-in capital 1,043,901 1,037,868
Notes receivable (33,514) (30,843)
Accumulated deficit (367,138) (395,655)
Deferred employee compensation (144,496) (124,627)
Common stock in treasury, at cost (4,129) (6,336)
---------- ---------
Total stockholders' equity 494,739 480,522
---------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 553,839 $539,817
========== ========
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Contact:
Tellium, Oceanport
Investors:
Jenniffer Collins, +1/732-483-3112
Email: JCollins@tellium.com
Media:
Mike Deshaies, +1/732-923-4160
Mobile: +1 732-558-3895
Email: mdeshaies@tellium.com |
