Teltrend Announces Record Sales in Fourth Quarter
Business Wire - September 02, 1998 16:29
ST. CHARLES, Ill.--(BUSINESS WIRE)--Sept. 2, 1998--Teltrend Inc. (Nasdaq:TLTN) today announced results for its
fourth quarter ended July 25, 1998.
Sales were $27.0 million, up 46% from last year's fourth quarter, bolstered by the Company's first quarter acquisition of a
British-based ISDN solutions business, now called Teltrend Ltd. Without Teltrend Ltd., sales increased 27%. Net income for
the quarter was $2.1 million, or $0.33 per diluted share, compared to net income of $2.0 million, or $0.30 per diluted share in
the prior year.
For fiscal 1998, sales totaled $96.8 million up 19% from last year. Net income for the year, including a first quarter purchased
in-process research and development charge of $4.0 million, was $2.2 million. Exclusive of this charge, net income for the year
totaled $6.2 million, or $0.96 per diluted share. This compares to net income of $9.6 million and EPS of $1.45 for fiscal 1997.
Teltrend also reported fourth quarter sales by business area. Sales of the Company's High Capacity Communications products
for the fourth quarter of fiscal 1998 were $14.0 million, compared to $11.4 million for the fourth quarter of last year. Fourth
quarter Channelized product sales were $9.5 million compared to $7.1 million for the fourth quarter of fiscal 1997. Finally,
fourth quarter sales for Teltrend Ltd., which was acquired in the first quarter of fiscal 1998, were $3.5 million.
"Our fourth quarter continued to demonstrate the strength of our base business," said Howard Kirby, Chairman and CEO.
"The 23% quarterly year-over-year growth in High Capacity Communications sales came from increased demand for our
CellPak(TM) products and from increased demand for certain of our T1 products that are associated with fiber optic and
HDSL applications, two strong markets. Also, sales of our Performance Monitoring T1 NIU are increasing. Performance
Monitoring technology is an area where we feel we have a clear lead over the competition.
"The 34% quarterly year-over-year growth in our Channelized product sales came from increased demand for both ISDN and
DDS products.
"The year-over-year quarterly Teltrend USA sales increase of 27% was spread across essentially all RBOCs plus our
non-RBOC customers. Demand so far this fiscal year remains strong, both domestically and for Teltrend Ltd."
Mr. Kirby continued, "Teltrend Ltd., our new British-based ISDN solutions business, contributed sales of $3.5 million in the
fourth quarter and $12.8 million for the year. This business has brought Teltrend three new ingredients which we needed. First
of all, it brought us a solid channel of distribution in Europe and the Pacific Rim. We recently issued a press release concerning
acceptance of our router products in China. Secondly, by virtue of Teltrend Ltd.'s New Zealand design center, we now have
the means to design packet switching technologies like IP voice into our traditional telco products. And finally, our UK
business has put us firmly into the world of ISDN primary rate and other European high-capacity transmission protocols.
"This month we go to field trial on UniPort(TM), our new 2-wire DDS provisioning system. UniPort(TM) allows the
provisioning of DDS circuits with two wires instead of four. With copper becoming more scarce, this is a significant advantage
for our customers. This month we will also go to field trial on the TLC-48(TM), our new small digital loop carrier system
aimed at Independent Telephone Companies and the emerging competitive local exchange carriers. It provides cost-effective
pairgain in a small, economical, and standards compliant package. We believe both the UniPort(TM) and the TLC-48(TM)
provide exciting growth opportunities this year.
"Later this year we plan to introduce FastPort(TM), a product which will allow extended range provisioning of DDS without
the need to go through the costly process of removing load coils. Also later this year, we plan to introduce a new system we
call ASTS for Advanced Span Termination System. ASTS represents the next-generation way to distribute high-capacity
signals in the local loop - by fiber, by HDSL, or by repeatered T1. In March we announced a partnership with Hekimian
Laboratories to incorporate economical end-to-end T1 testing and performance monitoring into this ASTS system. We're also
working with other transmission equipment suppliers to assure that best-in-class fiber optic, HDSL, T1, and protection
switching units are available for the ASTS system.
"Turning back for a moment to the financial side, during the year we expended cash of $14.5 million to purchase Teltrend Ltd.
and $1.7 million to repurchase Teltrend shares in the open market. The Company continues to have strong positive cash flow,
and even after the two cash outlays mentioned above, cash and marketable securities totaled nearly $25.0 million at the end of
our fiscal year.
"In summary, we end fiscal 1998 in a significantly improved strategic position - and look forward to the new year with
increased optimism," concluded Mr. Kirby.
Some of Mr. Kirby's statements in the previous paragraphs are forward looking. These statements, identified by the use of
phrases such as "will feel", "we believe", "provide exciting growth opportunities", "will be going to field trial", and "looking
forward", are based on current expectations and involve risks and uncertainties. Consequently, actual results could differ
materially from the Company's positive expectations expressed in the preceding paragraphs. The various factors that could
cause the Company to fail to achieve its positive expectations include, but are not limited to: competition from other, and in
certain cases more established, manufacturers of similar products; pricing pressure and other ramifications of the consolidation
of some of its major customers; the inability to achieve market acceptance of new products or products under development for
a variety of reasons, including their cost or the actual or perceived need for such products in the marketplace; the Company's
inability to integrate the operations of the acquired business in a cost effective manner; the failure of the Company's new
products to pass the rigorous testing and qualification process imposed by the Company's customers; the rapid pace with
which changes in technology, industry standards, and customer requirements occur within the telecommunications business,
and the adverse effect such changes and the introduction of new products involving new technologies could have on the
Company's ability to sell its new and existing products.
Teltrend is a leading manufacturer of advanced electronic equipment for the local telephone loop. The Company, based in
suburban Chicago, designs, manufactures and markets a broad range of voice and data solutions for the Regional Bell
Operating Companies, interexchange carriers, competitive access providers, and wireless carriers. Teltrend's unique solutions
-- developed for T1, HDSL, Fiber Optic, ISDN, DDS, and DLC applications -- allow telephone companies to provide new
and better services to their customers without the need for costly infrastructure replace |
