Avici Systems Announces Second Quarter 2006 Results
By BusinessWire
Last Update: 7/20/2006 7:30:51 AM
NORTH BILLERICA, Mass., Jul 20, 2006 (BUSINESS WIRE) -- Avici Systems Inc. (AVCI), today reported results for its second quarter and six-months ended June 30, 2006.
Gross revenue for the three and six-months ended June 30, 2006 was $25.3 million and $46.7 million, respectively, compared to $11.6 million and $22.4 million, respectively, for the three and six-month periods ended June 30, 2005. Revenue, net of common stock warrant discount, for the three and six-months ended June 30, 2006 was $25.3 million and $46.1 million respectively, compared to $11.1 million and $21.3 million for the three and six-months ended June 30, 2005.
"Due to a surge and acceleration in demand this quarter's revenue and bottom line results have far exceeded our expectations and resulted in the company turning cash flow positive. We expect to continue to see strong revenue and bottom line results in 2006, but caution that the business conditions driving this increased demand can change significantly. As we have previously announced, we have restructured our business to be profitable at what we believe is a reasonable going forward revenue baseline over the near term in a multi-vendor environment, even though we expect that 2006 will substantially exceed those levels," said Bill Leighton, Chief Executive Officer.
GAAP net income for the second quarter ended June 30, 2006 was $7.9 million, or $0.58 per share, compared to a GAAP net loss of $2.7 million, or $0.21 per share, in the prior year's second quarter ended June 30, 2005. GAAP net income in the 2006 period includes $1.0 million of costs associated with the first quarter restructuring, partially offset by termination credits net of non-cash equity based charges of $0.4 million recognized upon the prospective adoption of Financial Accounting Standards Board Opinion 123R, which now requires that the fair values of stock options be expensed in the Company's GAAP financial statements and credits of $0.1 million from the utilization of certain inventory previously written off. GAAP net loss in the 2005 period was benefited by $1.8 million, reported as other income, from $1.3 million in proceeds and the reversal of certain previously established reserves in connection with the Company's favorable disposition of a claim in bankruptcy and $0.2 million from the utilization of certain inventory previously written off, partially offset by $0.5 million for non-cash equity based charge relating to common stock warrant discount.
GAAP net income for the six-months ended June 30, 2006 was $2.6 million, or $0.19 per share, compared to a GAAP net loss of $8.3 million, or $0.64 per share, for the six-months ended June 30, 2005. GAAP net income for the six-months ended June 30, 2006 includes $7.7 million of special charges associated with the company's first quarter decision to restructure its business and re-align its cost structure, partially offset by termination credits net of non-cash equity based charges of $0.1 million recognized under Financial Accounting Standards Board Opinion 123R and credits of $0.2 million from the utilization of certain inventory previously written off. Special charges include $6.3 million of costs associated with the company's workforce reduction, the write-off of certain contract distribution rights deemed impaired and certain other costs associated with the company's decision to restructure its business and realign its cost structure and an additional charge of $1.4 million for certain inventory considered in excess of anticipated future requirements. GAAP net loss for the six-months ended June 30, 2005 is net of $1.1 million for common stock warrant discount offset by $1.8 million in connection with a settlement of a claim in bankruptcy and $0.3 million of inventory credits.
Non-GAAP net income (GAAP net income or loss excluding charges for restructuring, common stock warrant discount, certain stock based compensation, inventory and settlement credits) for the three months ended June 30, 2006 was $8.5 million, or $0.62 per share compared to Non-GAAP net loss of $4.1 million, or $0.32 per share in the second quarter of 2005. Non-GAAP net income for the six-months ended June 30, 2006 was $10.4 million, or $0.78 per share, compared to Non-GAAP net loss of $9.3 million or $0.73 per share for the prior year six-month period ended June 30, 2005.
Cash, cash equivalents, short and long-term marketable securities and restricted cash totaled $52.6 million at June 30, 2006.
Avici will discuss these quarterly results as well as future business and financial expectations in an investor conference call today at 8:30 AM eastern daylight savings time. The conference telephone number is (888) 639-6205. A replay of the conference call will be available after 11:15 AM. Replay information will be available at (800) 475-6701 (USA) access code: 834315. Replay of this call is also available on Avici's Web site, www.avici.com, along with a copy of this release.
Avici is a trademark of Avici Systems Inc.
This release contains information about Avici's future expectations, plans, and prospects, including Avici's expectations for annual gross revenues that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Statements made with regard to interim results are not necessarily indicative of results that may be expected for future interim periods or for the full year. When used in this press release, the word "will", "expected" and other similar expressions are intended to identify such forward looking statements. Such risks and uncertainties include, but are not limited to, the impact of restructuring and realignment, the amount and timing of the occurrence of related charges, risks associated with focusing on a core set of features and functionalities, market acceptance of Avici products, services and enhancements, dependence on our major customer, customer purchasing patterns and commitments, development of the market place, product development and enhancement, intensity of competition of other vendors, technological changes, reliance on distribution partners, risks associated with international expansion, and other risks set forth in Avici's filings with the Securities and Exchange Commission. Avici does not undertake any duty to update forward-looking statements.
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