Last Q sucked, revs down slightly, losses qudrupled:"OSICOM TECHNOLOGIES REPORTS FOURTH QUARTER, YEAR-END RESULTS; Tsilicon Subsidiary Files For IPO (who's gonna puch this BOS out the door? Which Sub Par Chatter undertaker?)
Business Editors
SANTA MONICA, Calif.--(BUSINESS WIRE)--March 11, 1999--Osicom
Technologies Inc. (NASDAQ NM: FIBR), a market leader in metro DWDM
(Dense Wavelength Division Multiplexing), said Thursday that revenues
from its premier Optical Networking GigaMux(TM) product line and from
its NETsilicon subsidiary rose strongly for the fiscal year ended Jan.
31, 1999, although overall revenues declined due to the phasing out of
legacy products and weakness in the Asian economy.
The company's loss narrowed, as gross profit in the Optical
Networking group and the NETsilicon subsidiary improved. According to
the announcement by Chairman and Chief Executive Officer Par Chadha,
acceptance of the company's GigaMux optical networking and NET+ARM
embedded networking products has been very strong, with more than 85
potential customers in various stages of evaluating GigaMux, a product
which enables the expansion of bandwidth capacity by as much as 32
times in new and existing fiber optic networks. The company expects to
ship more than $4 million of the current $5.3 million GigaMux backlog
in the fiscal first quarter ending April 30, 1999.
Revenues for fiscal 1999 were $94.9 million with a net loss of
$15.3 million or loss of $1.99 per diluted share, compared with
revenues for the previous year of $119.0 million with a net loss of
$16.2 million or a loss of $3.25 per diluted share. The diluted loss
per share for fiscal 1999 reflects an imputed dividend of $0.23 per
diluted share associated with the issuance of convertible preferred
securities. Chadha said that as revenues from its higher-margin
Optical Networking products increase, the company anticipates that
gross profit margins will improve above current levels; they were at
36 percent for the year ended January 1999, versus 31 percent for the
previous year. Optical Networking revenues in the fourth quarter of
fiscal 1999 were highlighted by the highest GigaMux revenues in the
company's history, as well as record revenues for NETsilicon, the
company's wholly-owned Waltham, Mass.-based subsidiary.
For the fiscal 1999 fourth quarter, revenues were $30.0 million,
with a net loss of $3.0 million, or loss of $0.34 per diluted share.
This compares with revenues of $30.4 million, with net income of
$369,000, or net income of $0.05 per diluted share for the prior
year's fiscal fourth quarter. The diluted loss per share for the 1999
fiscal fourth quarter reflects an imputed dividend of $0.03 per
diluted share associated with the issuance of convertible preferred
securities.
The company recorded additional reserves of approximately $1
million, or $0.11 per diluted share, against Far East division
receivables during the fiscal 1999 fourth quarter. The company is also
incurring expenses as it rolls out sales, marketing and support
infrastructure domestically, in Europe and in Asia in preparation for
the expected growth of its GigaMux line of products.
Osicom Vice President of Finance Christopher E. Sue said the
company's balance sheet showed cash and cash equivalents of $5.8
million, shareholder equity of $38.9 million, total assets of $86.8
million, total backlog of $18.8 million and long term debt of $2.9
million.
Optical Networking
GigaMux revenue for the fourth quarter grew to $1.3 million,
representing a 57 percent increase from the third quarter of fiscal
1999, and demonstrating significant acceptance by customers, each a
technology leader in its field. Revenues in the Optical Networking
business unit for fiscal 1999 increased to $14.2 million, compared
with revenues of $12.2 million for fiscal 1998, as sales shifted
strongly to the GigaMux product line at the end of fiscal 1999.
Chadha commented, "During the fourth quarter, we expanded our
Optical Networking sales and marketing efforts in the key European
countries of France, Spain, Italy and Switzerland. We anticipate the
growth in sales and backlog of GigaMux will expand beyond the current
$5.3 million. Additionally," Chadha said, "we entered into a
partnership with Pittsburgh, Pa.-based FORE Systems (NASDAQ:FORE) to
deliver metropolitan and regional area high-speed optical networking
solutions."
"Our Optical Networking product line received a further
endorsement in January of 1999 when GigaMux EPC(TM) (Electric Photonic
Concentrator), was designated one of the 50 winners in the Seventh
Annual Data Communications HOT PRODUCTS competition." The GigaMux EPC
enables a typical 2.5 Gbps 32-channel Metro DWDM system to deliver 512
subdivided channels, allowing customer premise equipment such as Fast
Ethernet switches and routers, to bypass costly SONET equipment and
connect directly to a DWDM system.
NETsilicon
"Earlier today," Chadha continued, "we announced that NETsilicon
filed an amendment to its registration statement with the SEC for an
underwritten IPO of approximately 3,000,000 shares of NETsilicon
common stock, of which Osicom will sell 1,000,000 shares. Dain
Rauscher Wessels will manage the offering, with Tucker Anthony Inc
acting as co-manager," he said.
This notice does not constitute an offer to sell securities and
is not soliciting an offer to buy securities. An offer shall only be
made by means of a prospectus.
Network Access
Fiscal 1999 fourth quarter revenues for the company's Network
Access business unit declined to $7.0 million when compared with
revenues of $12.6 million for the fourth quarter of fiscal 1998.
Revenues are expected to increase as a new suite of Network Access
products are introduced over the next few quarters.
Wireless Products (Far East Division)
During the fourth quarter, the company's Hong Kong-based,
wholly-owned subsidiary shipped all of an order, plus the initial
installments of a follow-on order for caller ID devices that was
originally placed by a U.S. RBOC in late October, driving total
revenues for the fiscal 1999 fourth quarter to $16.4 million, or
nearly a 183 percent increase over revenues of $5.8 million for the
third quarter of fiscal 1999. Shipments of 2-way pagers have started,
and the company's wireless PDA, addressing the PHS market in Japan, is
going through initial testing, with commercial shipments planned in
the near future.
Chadha said, "We continue to pursue the sale of this business
unit, which is establishing itself with its wireless communications
products, in order to focus even more on our core, higher-margin
businesses. We will disclose further details as they develop."
Osicom Technologies is a leading provider of integrated
networking and bandwidth aggregation solutions for enhancing the
performance of existing data and telecommunications networks. The
company combines expertise across multiple disciplines to offer fiber
transport, remote access, virtual private networking, video switching
and transport, and network systems-on-silicon to carrier and
enterprise customers. The company brings value to its customers by
offering end-to-end, single vendor solutions as an integrated set.
Osicom's offerings feature open architectures, offer complete
scalability and fully support industry standards. The company's
flagship products are the GigaMux family of Dense Wavelength Division
Multiplexers (DWDM) for short-haul Metro applications, the NET+ARM
system-on-silicon for network connectivity, and the IQX-200 family of
scaleable Remote Access Servers.
For additional company, product or financial information, visit
the Osicom Web site, www.osicom.com, or call toll free 888/OSICOM8.
For calls originating outside the United States, call 301/317-7710.
Except for the historical information contained herein, the
matters discussed in this news release are forward-looking statements
that involve risks and uncertainties. The forward-looking statements
in this release are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Actual results may
differ materially due to a variety of factors, including without
limitation the company's ability to develop, produce, and market
products that incorporate new technology on a timely basis, that are
priced competitively and achieve significant market acceptance; higher
expenses associated with the development and marketing of new
products; changes in product mix; risks of dependence on third-party
component suppliers; inventory risks due to shifts in market demand;
the presence of competitors with broader product lines and greater
financial resources; intellectual property rights and litigation;
needs for liquidity; and the other risks detailed from time to time in
the company's reports filed with the Securities and Exchange
Commission.
GigaMux, EPC, and DWDN are trademarks of Osicom Technologies Inc.
*T
OSICOM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
Jan. 31, 1999 Jan. 31, 1998
ASSETS
CURRENT ASSETS
Cash and equivalents $ 4,685 $ 1,912
Restricted cash 1,112 2,159
Accounts receivable, net 21,659 19,286
Inventory, net 17,696 21,922
Prepaid expenses and other current
assets 2,842 5,319
TOTAL CURRENT ASSETS 47,994 50,598
PROPERTY AND EQUIPMENT, NET 16,032 17,008
OTHER ASSETS
Purchased technology, net 1,766 2,138
Excess of cost over net assets acquired,
net 6,261 6,743
Capitalized software, net 5,105 4,144
Other assets 9,606 9,056
TOTAL OTHER ASSETS 22,738 22,081
TOTAL ASSETS $ 86,764 $ 89,687
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 15,218 $ 14,905
Current maturities of long term
debt 677 742
Accounts payable 23,290 21,768
Accrued liabilities 4,520 4,628
Other current liabilities 931 913
Income taxes payable -- 339
TOTAL CURRENT LIABILITIES 44,636 43,295
Long-term debt and capital lease
obligations 2,892 3,294
Deferred income taxes 378 378
TOTAL LIABILITIES 47,906 46,967
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
cumulative dividends; liquidation
preference $12,871 including
accumulated dividends 1 1
Common stock, $.30 par value; 16,667
shares authorized; 8,924 shares issued
8,844 shares outstanding at Jan. 31,
1999; 6,896 shares issued and 6,892
shares outstanding at Jan. 31, 1998 2,677 2,069
Additional paid-in capital 85,183 74,003
Accumulated deficit (48,479) (33,331)
Treasury stock, at cost; 80 shares
and 22 shares at Jan. 31, 1999
and Jan. 31, 1998, respectively (524) (22)
TOTAL STOCKHOLDERS' EQUITY 38,858 42,720
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 86,764 $ 89,687
OSICOM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share amounts)
Three Months Ended Twelve Months Ended
Jan. 31 Jan. 31
1999 1998 1999 1998
(Unaudited)
NET
SALES $ 30,046 $ 30,418 $ 94,949 $ 119,049
COST OF
SALES 18,588 21,128 60,379 81,906
GROSS
PROFIT 11,458 9,290 34,570 37,143
OPERATING EXPENSES
Selling and
marketing 6,244 4,080 19,150 17,601
Engineering, research and
development 2,420 1,855 9,853 7,172
General and
administrative 4,828 2,279 16,659 15,128
Other operating
expenses 213 43 852 11,885
TOTAL OPERATING
EXPENSES 13,705 8,257 46,514 51,786
INCOME (LOSS) FROM
OPERATIONS (2,247) 1,033 (11,944) (14,643)
OTHER INCOME (CHARGES)
Investment
income 69 122 367 490
Interest
expense (609) (570) (2,171) (2,101)
Gain on disposal of
assets -- (2) -- 422
Other income
(charges) 130 55 360 44
TOTAL OTHER INCOME
(CHARGES) (410) (395) (1,444) (1,145)
INCOME (LOSS) BEFORE INCOME
TAXES (2,657) 638 (13,388) (15,788)
PROVISION FOR INCOME
TAXES -- 230 -- 246
NET INCOME
(LOSS) $ (2,657) $ 408 $ (13,388) $ (16,034)
INCOME (LOSS) PER COMMON SHARE
ACCRUED UNDECLARED
DIVIDENDS 38 38 150 150
DEEMED DIVIDEND 301 -- 1,760 --
NET INCOME (LOSS) APPLICABLE TO COMMON
SHARES $ (2,996) $ 370 $ (15,298) $ (16,184)
PRIMARY
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING (RESTATED, IN
THOUSANDS) 8,728 6,462 7,673 4,987
NET INCOME (LOSS) PER COMMON
SHARE: $ (0.34) $ 0.06 $ (1.99) $ (3.25)
FULLY DILUTED
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (RESTATED, IN
THOUSANDS) 8,728 7,092 7,673 4,987
NET INCOME (LOSS) PER COMMON
SHARE: $ (0.34) $ 0.05 $ (1.99) $ (3.25)
OSICOM TECHNOLOGIES, INC.
AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (Unaudited)
(In Thousands)
NETWORK EMBEDDED OPTICAL FAR SUBTOTAL INTER TOTAL
ACCESS NETWORK NETWORKING EAST DIVISION
(NETSILICON) ELIMINATIONS
THREE MONTHS ENDED JANUARY 31, 1999:
NET
SALES $7,004 $4,959 $2,317 $16,406 $30,686 $(640) $30,046
COST OF
SALES 4,315 2,619 1,448 10,846 19,228 (640) 18,588
GROSS
PROFIT $2,689 $2,340 $ 869 $ 5,560 $11,458 $ -- $11,458
GROSS
MARGIN 38.4% 47.2% 37.5% 33.9% 37.3% 38.1%
THREE MONTHS ENDED JANUARY 31, 1998:
NET
SALES $12,605 $1,856 $3,954 $13,041 $31,456 $(1,038) $30,418
COST OF
SALES 7,543 874 2,511 11,238 22,166 (1,038) 21,128
GROSS
PROFIT $5,062 $ 982 $ 1,443 $ 1,803 $ 9,290 $ -- $ 9,290
GROSS
MARGIN 40.2% 52.9% 36.5% 13.8% 29.5% 30.5%
TWELVE MONTHS ENDED JANUARY 31, 1999:
NET
SALES $30,717 $13,373 $14,186 $39,590 $97,866 $(2,917) $94,949
COST OF
SALES 17,205 7,270 8,070 30,751 63,296 (2,917) 60,379
GROSS
PROFIT $13,512 $6,103 $6,116 $8,839 $34,570 $ -- $34,570
GROSS
MARGIN 44.0% 45.6% 43.1% 22.3% 35.3% 36.4%
TWELVE MONTHS ENDED JANUARY 31, 1998:
NET
SALES $45,171 $7,921 $12,237 $56,156 $121,485 $(2,436) $119,049
COST OF
SALES 25,181 4,061 7,757 47,343 84,342 (2,436) 81,906
GROSS
PROFIT $19,990 $3,860 $4,480 $8,813 $37,143 $ -- $37,143
GROSS
MARGIN 44.3% 48.7% 36.6% 15.7% 30.6% 31.2%
OSICOM TECHNOLOGIES, INC.
AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (Unaudited) -- continued
(In Thousands)
NETWORK EMBEDDED OPTICAL FAR SUBTOTAL INTER TOTAL
ACCESS NETWORK NETWORKING EAST DIVISION
(NETSILICON) ELIMINATIONS
THREE MONTHS ENDED OCTOBER 31, 1998:
NET
SALES $7,204 $3,030 $3,873 $5,846 $19,953 $(918) $ 19,035
COST OF
SALES 4,000 2,117 2,129 4,764 13,010 (918) 12,092
GROSS
PROFIT $3,204 $ 913 $ 1,744 $ 1,082 $ 6,943 $ -- $ 6,943
GROSS
MARGIN 44.5% 30.1% 45.0% 18.5% 34.8% 36.5%
THREE MONTHS ENDED JULY 31, 1998:
NET
SALES $8,513 $3,199 $ 3,389 $ 6,028 $21,129 $(809) $ 20,320
COST OF
SALES 4,650 1,497 2,213 5,429 13,789 (809) 12,980
GROSS
PROFIT $3,863 $ 1,702 $ 1,176 $ 599 $ 7,340 $ -- $ 7,340
GROSS
MARGIN 45.4% 53.2% 34.7% 9.9% 34.7% 36.1%
THREE MONTHS ENDED APRIL 30, 1998:
NET
SALES $7,996 $ 2,185 $ 4,607 $11,310 $26,098 $(550) $ 25,548
COST OF
SALES 4,240 1,037 2,280 9,712 17,269 (550) 16,719
GROSS
PROFIT $3,756 $ 1,148 $ 2,327 $ 1,598 $ 8,829 $ -- $ 8,829
GROSS
MARGIN 47.0% 52.5% 50.5% 14.1% 33.8% 34.6%
*T
--30--JS/np* JP/np
CONTACT: Boston Communications Worldwide
Constantine Theodoropulos, 617/912-1100
ctheo@bcww.com
or
Allen & Caron Inc.
Damon Wright (investor relations)
damon@allencaron.com
or
Owen Daley (financial/business media), 714/957-8440
owen@allencaron.com
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