[Off topic: NN news]
Maverick --
Here's the NN announcement. As I expected, it involves their UB Networks, enterprise LAN segment:
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Newbridge Networks Announces Preliminary Estimates of Third Quarter Fiscal 1998
PR Newswire - February 02, 1998 18:27
KANATA, Ont., Feb. 2 /CNW-PRN/ - Newbridge Networks Corporation today announced preliminary estimates of financial results for the third quarter of fiscal year 1998, which ended February 1, 1998. Revenue for the third quarter is expected to be approximately $360 million, compared with revenue of $333 million for the third quarter of fiscal 1997. Revenue for the first nine months of fiscal 1998 is expected to be approximately $1,227 million, an increase of more than 30% over the comparable period for the prior fiscal year. Excluding one-time charges and gains, pro forma fully diluted earnings per share for the quarter are expected to be 10 cents, in accordance with Canadian GAAP. Fully diluted earnings per share on a pro forma basis, in U.S. currency, calculated in accordance with U.S. GAAP, and translated at the average exchange rate for the quarter of 0.7006, as reported by the Federal Reserve Bank of New York, are expected to be 7 cents.
One time gains and charges in the quarter are estimated to be: 1) a gain of $50 million before income tax, associated with the disposition of the Company's equity position in Broadband Networks Inc.; 2) amortization of $26 million under Canadian GAAP related to research and development in process associated with the acquisition of Radnet Ltd., which was jointly acquired with Siemens AG during the quarter; 3) a charge for estimated restructuring costs related to the Company's Enterprise LAN Distribution business relating to the former UB Networks. The restructuring charge will include severance and facilities closure costs, a write-down of inventory, deferred tax assets and other assets and write-off of goodwill. Further details on this item will be provided when the Company releases final results for the quarter on February 24, 1998.
The decline in revenue from the previous quarter results principally from a significant sequential decline in revenue for time division multiplexer (TDM) systems. TDM revenues in the quarter were affected by the increasing fluctuations or variations in quarterly revenues characteristic of this business as a growing proportion of the TDM business comes from markets outside North America. This characteristic was exhibited across the Company's three largest international markets for TDM equipment: Europe, Asia and Latin America. TDM revenue was also affected by the volatility in general economic conditions in certain countries in Latin America and Asia. TDM revenue is expected to improve in the fourth quarter of fiscal 1998.
The cumulative sales of Newbridge(R) 3600 and 3645 MainStreet(R) systems have grown to approximately $3 billion. This large installed base of equipment represents a downstream opportunity to evolve the Newbridge TDM-based circuit-switched networks of many of the world's 200 largest carriers to hybrid, frame relay and asynchronous transfer mode (ATM) networks.
Revenue for the Company's ATM products is expected to reach record levels again in the third quarter of fiscal 1998. This will be the ninth consecutive record quarter for ATM revenue. Order intake for ATM equipment, driven principally by the MainStreetXpress(TM) 36170 Multiservices Switch, is expected to more than double the level achieved in the corresponding quarter last year. The Company's wide area network (WAN) packet business represented more than 50% of total revenue, up from 45% in the previous quarter. This resulted from growth in MainStreetXpress 36170 system revenue, which partially offset a revenue decline in the Company's more mature packet system, the 36120 MainStreet Packet Transfer Exchange frame relay system. Revenue for this product is expected to improve in the fourth quarter of fiscal 1998.
VIVID switched routing system sales are expected to increase by
approximately 40% compared with the previous quarter, while Enterprise LAN Distribution revenue associated with the former UB Networks products is expected to decline slightly on a sequential basis, resulting in overall LAN packet revenue approximately equal to the preceding quarter.
There were 20 new customers for the MainStreetXpress 36170 system in the quarter, boosting the total number of customers for the product to more than 200. These are predominantly public carrier customers and represent many of the world's largest telecommunications service providers. More than 90% of the MainStreetXpress 36170 system customers are Newbridge TDM customers, underscoring the importance to the Company of the large installed base of carrier and corporate customers as organizations migrate to a unifying multiservices ATM platform for various network traffic.
Total orders are expected to exceed shipments in the quarter.
''The third quarter was a challenging period for Newbridge,'' said Terence Matthews, Chairman and CEO of Newbridge Networks Corporation. ''However, despite the financial performance, the Company continued to advance through numerous important initiatives. Newbridge operates in a dynamic and competitive market. Certainly our efforts in the quarter to resolve the UB Networks situation required a significant amount of management time and attention. The action plan is now being implemented. The actions being taken will enable the Company to refocus on the enterprise market from our traditional position of strength as a WAN equipment vendor. Our new alliance with 3Com Corporation, which we announced last week, will broaden and deepen the product solution set Newbridge brings to the market.
''This new alliance with 3Com complements the long-standing Siemens / Newbridge relationship, which took on the stature of a formal alliance in broadband networking almost two years ago. Siemens, 3Com and Newbridge represent a powerful combination in the networking industry. Together, we introduced Carrier Scale Internetworking (CSI) at Interop in October 1997. I am pleased to report that CSI is winning approval with many new partner manufacturers and service providers throughout the world. It is clear that premium IP is recognized as an important new networking requirement for corporate customers.
''Newbridge remains solidly positioned in its core WAN business, a market that offers excellent opportunities. The Company continues to build on its broad and long-standing customer base throughout the world. We are focused and intent on capturing additional business in our core markets related to new access technologies, multiservices ATM and new networking applications.''
The preliminary revenue and earnings results in this news release are estimates and may change upon the completion of the closing cycle for the quarter. Final results for the quarter are scheduled to be released on February 24, 1998, at which time the Company will provide additional analysis.
This news release may contain certain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from results indicated in any forward-looking statements. The Company cautions that, among other things, in view of the rapid technological changes in the networking industry, if technologies or standards supported by the Company's products, or common carrier services based on the Company's products become obsolete or fail to gain widespread commercial acceptance, the Company's business may be adversely affected. Additional information identifying risks and uncertainties is contained in the Company's most recent Form 10-K annual report filed with the SEC.
Newbridge Networks is a world leader in designing, manufacturing,
marketing and servicing a comprehensive family of networking products and systems that delivers the power of multimedia communications to organizations in more than 100 countries throughout the world. Newbridge products are the choice of an expanding range of customers which includes the world's 200 largest telecommunications service providers, as well as more than 10,000 corporate customers, government organizations and other institutions. The Company has facilities throughout Canada, the United States, Latin America, Europe, the Middle East, Africa and Asia.
Newbridge Networks Corporation is a public company whose shares are listed on the New York Stock Exchange (NN) in the United States and on The Toronto Stock Exchange (NNC) in Canada.
SOURCE Newbridge Networks Corporation
/CONTACT: John Lawlor (613) 591-3600, john_lawlor(at)newbridge.com/
(NNC. NN)>>> |
