Xylan Reports Record First-Quarter Results
Business Wire - April 15, 1998 16:35
%XYLAN XYLN %CALIFORNIA %TELECOMMUNICATIONS %COMPUTER %ELECTRONICS %COMED %EARNINGS V%BW P%BW
CALABASAS, Calif.--(BUSINESS WIRE)--April 15, 1998--Xylan Corp. (Nasdaq:XYLN), a leading provider of high-bandwidth switching systems, Wednesday reported its operating results for the quarter ended March 31, 1998.
Revenue for the quarter increased to $75.4 million from $64.2 million in the fourth quarter of fiscal 1997, a sequential increase of 17 percent. As compared with the same quarter of the preceding year, revenues increased from $48.0 million, an increase of 57 percent.
Net income for the quarter was $8.4 million or 18 cents per share, compared with fourth-quarter net income of $6.6 million, or 14 cents per share. In the first quarter of 1997, the company reported net income of $5.9 million or 13 cents per share. All per share amounts are computed on a diluted basis.
"We are very pleased with our March quarter results," stated Steve Kim, chairman, president and chief executive officer. "In addition to achieving a 17 percent sequential increase in revenue, we improved net income by 28 percent over the previous quarter.
"Our goal is to continue to have double-digit growth in revenues for each quarter of 1998 and to continue to improve operating margins. We believe that networking markets continue to provide excellent opportunities for growth, and it is clear that Xylan is very well positioned to take advantage of that growth."
As of March 31, 1998, the company's cash, cash equivalents, and short- and long-term investments equaled $133 million, and shareholders' equity equaled $222 million. The combined decrease in cash, cash equivalents and short- and long-term investments is attributable to the company buying back approximately 302,000 shares of its common stock during the first quarter of 1998.
About Xylan
Xylan is one of the leading campus-switching vendors in the world. Its products integrate LAN switching, ATM switching, layer-three switching and wide-area switching, over a wide range of interfaces and media. Xylan's switches are distinguished by advanced architectures and chip designs and by any-to-any translation.
The same XOS software is available in a full range of Xylan switches, from a small workgroup Ethernet switch to a large multi-layer backbone switch. As a result, a Xylan network delivers cohesive services.
Xylan's Switched Network Services will take switching to the next step: a comprehensive set of services, including DHCP, network address translation, LDAP, RADIUS, DNS, multicast switching and routing, RSVP, broadcast management, policy-based configuration, and multi-layer accounting. Many of these services are already shipping. More information is available on Xylan's Web page at www.xylan.com.
Except for historical information contained herein, the matters discussed in this news release may contain forward-looking statements involving risks and uncertainties that may cause actual results to differ materially. Among the factors that could cause results to differ are uncertain market acceptance of the company's products, general economic conditions, overall demand levels for networking solution products, the timely development of new products and intense competition in the networking industry. Readers are referred to the documents filed by Xylan with the Securities and Exchange Commission, including the company's most recent reports on Form 10K and 10Q, which identify important risk factors related to the company's business that could cause actual results to materially differ from those contained in the forward-looking statements.
XYLAN CORP. AND SUBSIDIARIES
Consolidated Condensed Income Statements
(In thousands, except per share data)
Three Months Ended
March 31, Dec. 31, March 31,
1998 1997 1997
(unaudited)
Revenue $ 75,370 $ 64,202 $ 48,008
Cost of revenue 32,652 27,915 20,663
Gross profit 42,718 36,287 27,345
Operating expenses:
Research and development 8,787 7,512 5,506
Sales and marketing 20,108 18,122 12,621
General and administrative 2,237 2,044 1,577
Total operating expenses 31,132 27,678 19,704
Operating income 11,586 8,609 7,641
Interest income, net 1,491 1,504 1,828
Income before income taxes 13,077 10,113 9,469
Income tax expense 4,692 3,551 3,601
Net income $ 8,385 $ 6,562 $ 5,868
Net income per share:
Basic 19 cents 15 cents 14 cents
Diluted 18 cents 14 cents 13 cents
Shares used in per
share calculation:
Basic 43,109 42,945 42,147
Diluted 47,434 47,115 46,594
XYLAN CORP. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
March 31, Dec. 31,
1998 1997
(unaudited)
Assets
Current assets:
Cash, cash equivalents and
short-term investments $ 63,397 $ 79,088
Accounts receivable, net 53,701 53,013
Inventories, net 23,246 17,731
Deferred income taxes, net 6,438 6,100
Prepaid expenses and other
current assets 3,879 2,892
Total current assets 150,661 158,824
Investments 69,494 59,382
Note receivable 7,500 7,500
Property and equipment, net 23,798 20,894
Other assets 4,788 4,306
Total assets $ 256,241 $ 250,906
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
expenses $ 22,282 $ 26,382
Deferred revenue 7,667 4,317
Other current liabilities 3,422 3,191
Total current liabilities 33,371 33,890
Deferred revenue 1,229 899
Other liabilities -- 17
Total liabilities 34,600 34,806
Shareholders' equity:
Common stock and additional
paid-in capital 187,930 190,774
Retained earnings 33,711 25,326
Total shareholders' equity 221,641 216,100
Total liabilities and
shareholders' equity $ 256,241 $ 250,906
CONTACT: Xylan Corp., Calabasas
Dale Bartos, 818/878-4590
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