Cabletron Systems Announces Second QuarterSales and Earnings
September 21, 1998 04:28 PM
ROCHESTER, N.H.--(BUSINESS WIRE)--Sept. 21, 1998--Cabletron Systems CS announced today revenues of $370.6 million for the second quarter of fiscal 1999, ended August 31, 1998. Net sales for the second quarter of fiscal 1999 were $370.6 million, as compared with $371.3 million in the second quarter of fiscal 1998. Cabletron's sequential comparatives are $370.6 million in revenues vs. $365.7 million in the first quarter of fiscal 1999. Net income for the quarter improved to $14.6 million, or $0.09 per share on a diluted basis, compared to operating earnings of $0.04 per diluted share in the pervious quarter and net income of $57.6 million or $0.36 per share on a diluted basis in the second quarter of fiscal 1998. "We are pleased with our continued progress this quarter, and are excited about the new opportunities that our products and Synergy Plus channel program are bringing to our business," said Craig Benson, Cabletron's chairman and CEO. "With the continued transition from older shared-access technologies to next-generation switching, we clearly still have work ahead of us," Benson continued. The company has seen a significant revenue shift from shared media to switched technologies. Two years ago, shared media represented over 70 percent of Cabletron's total revenue; today it is less than 15 percent. Switching accounts for over 50 percent of total revenue -- the highest ratio among the major networking companies. "Technology shifts are not unusual in this business, but what sets Cabletron apart is our ability to anticipate changing customer requirements," said Benson. "With a strong heritage that began during our days as a cable company, Cabletron will continue to evolve, providing unrivaled solutions for the enterprise and carrier markets."
About Cabletron Cabletron Systems, a premier provider of enterprise class networking solutions, enables dependable network access and communications for millions of people throughout the world under its Smart Networking architecture. With scaleable products designed for Fortune 1000 enterprise networks, service providers and small businesses, Cabletron provides simple, reliable, and cost-effective business solutions for the information age.
The statements in this press release regarding future events or results constitute forward looking information, and actual results could differ materially. Among the factors that could cause actual results to differ are competitive conditions, the adverse margin impact of competition and lower margin reseller sales, difficulties in assimilating the operations, technologies and products of recently acquired companies, risks of entering new markets and distribution channels, and changes in overall demand levels for computer networking products. For a more detailed discussion of the risks and uncertainties related to the Company's business, please refer to the company's Annual Report on Form 10-K for fiscal 1998 filed on May 29, 1998.
CABLETRON SYSTEMS, INC.
Consolidated Condensed Statements of Operations
(three months ended August 31, 1998 and 1997)
(in thousands, except per share data)
(unaudited)
Second Quarter
1999 1998
Net sales $370,591 $371,293
Cost of sales 195,000 159,032
Gross profit 175,591 212,261
Operating expenses:
R & D 53,941 44,415
S G & A 103,513 85,412
Operating income 18,137 82,434
Interest income 4,081 4,819
Income from operations
before income taxes 22,218 87,253
Income tax expense 7,576 29,666
Net income $14,642 $57,587
Earnings per share $0.09 $0.36
Weighted average number of
common shares outstanding 170,462 159,867
CABLETRON SYSTEMS, INC.
Consolidated Condensed Balance Sheets
(August 31, 1998 and February 28, 1998)
(in thousands)
Assets
(unaudited)
8/31/98 2/28/98
Cash & short-term investments $259,519 $324,057
Accounts receivable (net) 260,534 241,181
Inventories 258,715 309,667
Deferred income taxes 78,047 81,161
Other assets 74,501 78,084
Total current assets 931,316 1,034,150
Investments 164,489 123,272
Property, plant & equipment (net) 238,954 244,730
Intangible assets 49,845 36,867
Deferred income taxes 155,788 155,251
Total assets $1,540,392 $1,594,270
Liabilities & Stockholders' Equity
Accounts payable $100,039 $79,969
Other current liabilities 420,407 392,781
Total current liabilities 520,446 472,750
Long term obligations --- 132,500
Total liabilities 520,446 605,250
Stockholders' equity 1,019,946 989,020
Total liabilities &
stockholders' equity $1,540,392 $1,594,270
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