3Com Reports Fiscal Q4 Results; Company Exceeds First Call Earnings Estimates; Cash Balances Increase to $1.38 Billion.Business Editors 3Com Corporation (Nasdaq:COMS COMS 3Com Corporation (stock symbol) COMS Certified Orientation and Mobility Specialist COMS Continuous Opacity Monitoring Systems COMS City of Manchester Stadium (UK) ) today reported financial results for its fourth quarter of fiscal year 2002 ended May 31, 2002. "We made extraordinary progress in a difficult year," said Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Claflin, 3Com president and chief executive officer. "We exit the year in fundamentally better shape in almost every aspect from customer relations to financial performance, and are well positioned for the future." Revenues for the quarter were $339 million, down five percent from the prior fiscal quarter. Gross margins were $149 million, or 44 percent, up over six percentage points sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , which include $38 million of amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , were $187 million, a decrease of $121 million sequentially. The net loss was $24 million, or $0.07 per share, which is $212 million, or 60 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , better than the prior quarter. For the fourth fiscal quarter, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma (1) net income was $13 million, or $0.04 per share, which exceeded the First Call consensus estimate of ($0.02) cents per share. The company ended the quarter with $1.38 billion in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, an increase from the previous quarter. Strong working capital management continued, with a cash-to-cash cycle of zero days. Collection of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying (DSO See CSO. ) improved to 39 days, average days payables Payables Related: Accounts payable outstanding (DPO DPO Direct Public Offering (finance/investment) DPO Direct Public Offering DPO District Police Officer (Pakistan) DPO Days Payables Outstanding DPO Document Process Outsourcing DPO Days Past Ovulation ) was 71 days, and average inventory turnover improved to 11.3 turns. NOTE: Attached is the full text of 3Com president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Bruce Claflin's fiscal fourth quarter 2002 formal earnings remarks. Additional comparative financial data is also attached. (1) Pro forma results exclude amortization and write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of intangibles, restructuring charges, and net gains (losses) on investments. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. This press release and Mr. Claflin's remarks on the quarterly results contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws, including statements regarding the following: our gains in market segments; cost and expense management; the performance of the economy and the particular segments in which we and our customers operate; our ability to achieve revenue growth and profitability; revenue; gross margins; contribution margins; our existing and future product offerings; P&L performance; working capital management; our balance sheet; and trends in external markets in certain geographies. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially, including the following: possible fluctuations in the demand for our products and in economic conditions affecting the markets for our products; our ability to successfully manage costs and expenses; possible delays or inability to collect accounts receivable; guarantees or other credit arrangements with end customers; continued or increased reductions in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in the technology and networking sectors; possible development or marketing delays relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our product offerings; our ability to plan and forecast channel and company inventory; possible defects in our product offerings; the introduction of new products by competitors or entry of new competitors into the markets for our products; and recovery in the capital equipment expenditures of carriers and service providers. A detailed discussion of other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in 3Com's most recent filings with the Securities and Exchange Commission, including 3Com's quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarterly period ended March 1, 2002. 3Com undertakes no obligation to update forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date of this press release. About 3Com Corporation 3Com is a global leader in functionally-rich, easy-to-use networking products that connect businesses to their employees, customers and suppliers anytime, anywhere. 3Com is also a leader in Internet protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP) service platforms and access infrastructure for the network service provider market. In 1979, the company was founded by one of the inventors This is a list of inventors. See also: List of scientists, Timeline of invention, List of inventions named after people, List of inventors killed by their own inventions, and . of Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer technology on which virtually all local area networks are based. Since then, 3Com has sold more than 360,000,000 Ethernet connections. 3Com has headquarters in Santa Clara, California Santa Clara, California (IPA: /ˌsæntəˈklærə/) , founded in 1777 and incorporated in 1852, is a city in Santa Clara County, in the U.S. state of California. and offices around the world. For further information, please visit www.3com.com, or the press site www.3com.com/pressbox. Comments on the Fourth Quarter of Fiscal 2002 To be delivered during the analyst conference call by Bruce Claflin, 3Com president and chief executive officer Going into this past fiscal year, 3Com, like all of the IT industry, was well into what has now been seen as the longest, deepest downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. the industry has ever experienced. This caused most companies in the networking sector to report dramatic losses and mandated rapid and immediate changes in companies' structures and strategies. 3Com was no exception. Yet today, 3Com is in fundamentally better shape, and in that regard, we are an exception. In our fourth fiscal quarter, we delivered pro forma profits on both net and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. levels. We ended the quarter with $1.38 billion of cash, and have reduced debt, while generating $21 million of cash from operations. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , we have improved our relationships with our partners and customers while maintaining investments that will drive growth in the future. By any measure, the progress we made this past year is extraordinary and I want to thank the people of our company whose heroic he·ro·ic adj. Relating to a risky medical procedure that may endanger the patient but also has a possibility of being successful, whereas lesser action would result in failure. efforts made this performance possible. 3Com can now turn its attention to creating a thriving thrive intr.v. thrived or throve , thrived or thriv·en , thriv·ing, thrives 1. To make steady progress; prosper. 2. company; one that delivers growth faster than the industry, while generating significantly improving financial returns. We do this knowing full well that the depressed conditions that plagued our industry the past year and a half continue to persist and the turning point is not yet possible to forecast. Despite difficult market conditions, we believe 3Com can grow strategically important product lines and take market share in these segments, all while driving further efficiencies throughout the company. And we believe we can manage certain products in declining segments to generate profits and cash. Let me comment more on each of these points. We expect the market fundamentals for enterprise sales in certain geographies such as the Americas A·mer·i·cas , the See America. to improve. Further, we intend to gain share over the competition. We will do this by leveraging new technologies and by exploiting our increasingly competitive cost position. Over the past year there have been some encouraging trends. Product sales for our enterprise infrastructure business grew 3% in the second half of the year versus the first half. In Q4, product sales grew 4% sequentially over Q3. Revenues for layer 2 fixed switches grew 1% sequentially. For layer 3 fixed gigabit switches, a key growth segment, revenues grew 16% sequentially in Q4 and we garnered 27% port share in calendar Q1'02 per the Dell `Oro Group, overtaking o·ver·take tr.v. o·ver·took , o·ver·tak·en , o·ver·tak·ing, o·ver·takes 1. a. To catch up with; draw even or level with. b. To pass after catching up with. 2. Extreme Networks. Further, in the emerging markets for LAN Telephony An IP telephony system that is contained within a local area network (LAN). See IP telephony and voice capable Ethernet switch. and Wireless LANs A local area network that transmits over the air typically in the 2.4 GHz or 5 GHz unlicensed frequency band. It does not require line of sight between sender and receiver. Wireless base stations (access points) are wired to an Ethernet network and transmit a radio frequency over an area , we grew Q4 revenues by double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. percentages over Q3. Despite cutbacks in many parts of our company, we protected investments in areas that will drive future enterprise growth. We have been hiring direct touch sales representatives in order to drive demand and support our channels. While improving our own profitability, we made sure we didn't did·n't Contraction of did not. didn't did not didn't do do it at the expense of our partners. A recent Computer Reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. News (CRN CRN Computer Reseller News CRN Crown CRN Council for Responsible Nutrition CRN Crane CRN Community Recycling Network CRN Course Reference Number CRN Center for Responsible Nanotechnology CRN Cornish (SIL code, UK) ) VAR survey confirmed 3Com is their most profitable networking partner, making us increasingly valuable to resellers as they too address the industry slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. . We have continued to invest in R&D, which has produced exciting initiatives like our XRN XRN - A newsreader program for Usenet news running under the X Window System. product architecture. XRN stands for eXpandable Resilient See resiliency. Networking. It offers customers the ability to aggregate network traffic on a "pay as you grow" basis, reducing the cost and complexity previously associated with core networking, while providing high performance, reliability and availability. Let me turn to CommWorks, our unit that targets the Carrier/ISP marketplace. We are all aware of the continued depressed state of the telecom segment. I do not believe this sector will improve in any meaningful way over the course of our new fiscal year. Nonetheless, there will be an end to this contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction and, when that occurs, service providers will commit capital to technologies that generate revenue and reduce costs. This plays to our strengths. For example our Voice-over-IP solutions, which we have deployed at companies like AT&T and MCI/Worldcom, substantially reduce the cost of delivering traditional voice traffic. In addition, VoIP systems enable the rapid creation of "micro services" such as phone service integrated with access to corporate databases and various forms of personal communications management Communications management is the systematic planning, implementing, monitoring, and revision of all the channels of communication within an organization, and between organizations; it also includes the organization and dissemination of new communication directives connected with an , which deliver new revenue streams for our customers. And, our leadership position in CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. wireless allows our customers to deliver new high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. voice and data services over their existing wireless networks. We will continue to fund CommWorks' major product initiatives, intending to capture what we believe will be a wave of investment in IP-based infrastructure when market conditions improve. During this investment period we will continue to reduce this unit's cost structure, ensuring minimal cash consumption, but will do so in ways that drive efficiency. Let me turn to our basic 10/100 NICs and related Ethernet PC cards; products that are in decline as basic connections get built directly into silicon. This past year we successfully managed these declining product lines. We generated increased cash each quarter from this segment, while continuing to offer competitive products to PC OEMs and the branded channel. We will continue this approach in the coming fiscal year. 3Com's balance sheet strength and improving financial performance has enabled us to maintain our R&D investment at 16% of revenues as we exit fiscal year 2002. In this year, 3Com was awarded another 205 U.S. patents, bringing the total number of U.S. patents issued to 3Com up to 790, with a total of 983 patents in our worldwide portfolio. Given all this, what should you expect from 3Com over the next year? We intend to gain market share in key enterprise segments, growing our overall enterprise product business modestly on a year-over-year basis. These gains may be larger if market conditions improve. We believe our CommWorks revenue will largely follow carrier capex spending; consequently, we are not projecting growth for the year. Last, as mentioned, for much of our connectivity segment including basic 10/100 NIC (1) (Network Interface Card) See network adapter. See also InterNIC. (2) (New Internet Computer) An earlier Linux-based computer from The New Internet Computer Company (NICC), Palo Alto, CA. and Ethernet PC Card products, we expect revenue declines. Therefore, at the aggregate level, total revenue will be challenged, particularly over the next few quarters. However we believe our most meaningful measure of success will be market share and growth in key enterprise and carrier product segments, and by these measures we are already demonstrating progress. Let me comment on our earnings outlook. The bottom line will benefit from continued progress towards a more efficient cost structure. To that end we will combine BNC (hardware) BNC - A connector for coaxial cable such as that used for some video connections and RG58 "cheapernet" connections. A BNC connector has a bayonet-type shell with two small knobs on the female connector which lock into spiral slots in the male connector when it is twisted and BCC (Blind Carbon Copy) The field in an e-mail header that names additional recipients for the message. It is similar to carbon copy (cc), but the names do not appear in the recipient's message. Not all e-mail systems support the bcc feature. See fcc. and intend to continue outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of selected operations. These moves are expected to reduce costs overall while improving our ability to scale our business rapidly. We intend to further reduce our G&A costs by leveraging improved systems and processes. As a result, we believe our earnings growth can outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, our top-line growth. Last, we will continue our track record of world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. working capital management, an area of proven strength at our company. This past quarter our cash to cash cycle was 0 days, by far the best in the networking industry. The leading, tier one networking company of the future will be the one that offers innovative, feature-rich products and solutions that excel at Verb 1. excel at - be good at; "She shines at math" shine at excel, surpass, stand out - distinguish oneself; "She excelled in math" low cost of acquisition and ownership. Further, if that company also maintains the lowest cost structure and best asset velocity, it can generate superior financial returns. We intend to be that company. 3Com is well positioned to deal with the current market slowdown and we look forward with optimism to the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. . The questions about our very survival are well behind us. One year ago, we started customer calls with apologies for past decisions. Today, we enter the customer's office confident in our offerings and proud of the progress our company has made over the past year. We can compete at any level--features, function, quality, support and price. Our partners make more money selling our products and our customers get more value buying us. In summary, we have made enormous progress in a difficult market and we expect to make even more in the coming fiscal year.
3Com Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
May 31, March 1, June 1, May 31, June 1,
2002 2002 2001 2002 2001
-------- -------- -------- ------- -------
Sales $338,511 $355,978 $468,033 $1,477,932 $2,820,881
Cost of sales 189,547 222,506 421,534 993,694 1,983,231
Non-recurring
inventory charges -- -- 215,119 6,037 304,019
--------- -------- ------- --------- ---------
Gross margin 148,964 133,472 (168,620) 478,201 533,631
--------- -------- ------- --------- ---------
Operating expenses:
Sales and
marketing 64,826 76,638 153,345 330,683 803,994
Research and
development 54,208 72,275 109,796 285,584 535,718
General and
administrative 29,314 29,421 33,951 130,552 182,090
Amortization and
write down of
intangibles 23,794 63,517 34,415 116,679 69,707
Restructuring
charges 14,372 64,039 120,928 167,462 163,657
Losses (gains)
on land and
facilities, net -- 1,375 -- 1,375 (178,844)
Purchased in-process
technology -- -- -- -- 60,221
Merger-related
credits, net -- -- -- -- (728)
--------- -------- ------- --------- ---------
Total operating
expenses 186,514 307,265 452,435 1,032,335 1,635,815
--------- -------- ------- --------- ---------
Operating loss (37,550) (173,793) (621,055) (554,134) (1,102,184)
Gains (losses)
on investments, net 1,684 (12,302) 25,887 (17,888) (18,614)
Litigation
settlement -- -- -- -- (250,000)
Interest on
income tax refund -- -- -- 12,145 --
Interest and
other income, net 12,271 9,302 22,351 55,226 144,596
--------- -------- ------- --------- ---------
Loss from continuing
operations before
income taxes and
equity interests (23,595) (176,793) (572,817) (504,651) (1,226,202)
Income tax
provision (benefit) 163 59,341 (55,090) 91,299 (257,641)
Equity interest in
loss of
unconsolidated
investee -- -- -- -- 1,352
--------- -------- ------- --------- ---------
Loss from
continuing
operations (23,758) (236,134) (517,727) (595,950) (969,913)
Income from
discontinued
operations -- -- -- -- 4,537
--------- -------- ------- --------- ---------
Net loss $ (23,758)$(236,134)$(517,727) $(595,950) $(965,376)
======== ======== ======== ======== ========
Net loss per basic
and diluted share:
Continuing
operations $ (0.07) $ (0.67) $ (1.52) $ (1.71) $ (2.81)
Discontinued
operations -- -- -- -- $ 0.01
--------- -------- ------- --------- ---------
$ (0.07) $ (0.67) $ (1.52) $ (1.71) $ (2.80)
======== ======== ======== ======== ========
Shares used in
computing basic
and diluted per
share amounts: 355,345 351,596 340,744 349,489 345,027
3Com Corporation
Pro Forma Condensed Consolidated Statements of Operations
(Excludes Non-recurring Inventory Charges, Amortization and Write
Down of Intangibles, Restructuring Charges, Net Losses (Gains) On Land
and Facilities, Purchased In-process Technology, Net Merger-related
Credits, Net Gains (Losses) On Investments, Litigation Settlement,
Interest On Income Tax Refund, Write Down of Deferred Tax Asset, and
Income From Discontinued Operations)
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Year Ended
----------------------------------------------------
May 31, March 1, June 1, May 31, June 1,
2002 2002 2001 2002 2001
-------- -------- -------- ---------- ----------
Sales $338,511 $355,978 $468,033 $1,477,932 $2,820,881
Cost of sales 189,547 222,506 421,534 993,694 1,983,231
-------- -------- -------- ---------- ----------
Gross margin 148,964 133,472 46,499 484,238 837,650
-------- -------- -------- ---------- ----------
Operating expenses:
Sales and
marketing 64,826 76,638 153,345 330,683 803,994
Research and
development 54,208 72,275 109,796 285,584 535,718
General and
administrative 29,314 29,421 33,951 130,552 182,090
-------- -------- -------- ---------- ----------
Total operating
expenses 148,348 178,334 297,092 746,819 1,521,802
-------- -------- -------- ---------- ----------
Pro forma operating
income (loss) 616 (44,862) (250,593) (262,581) (684,152)
Interest and
other income, net 12,271 9,302 22,351 55,226 144,596
-------- -------- -------- ---------- ----------
Income (loss)
from continuing
operations before
income taxes and
equity interests 12,887 (35,560) (228,242) (207,355) (539,556)
Income tax provision
(benefit) 88 6,756 (21,951) 17,260 (119,340)
Equity interest in loss
of unconsolidated
investee -- -- -- -- 1,352
-------- -------- -------- ---------- ----------
Pro forma net
income (loss) $12,799 $(42,316) $(206,291) $(224,615) $(421,568)
======== ========= ========== ========== ===========
Pro forma net income
(loss) per share:
Basic $ 0.04 $ (0.12) $ (0.61) $ (0.64) $ (1.22)
Diluted $ 0.04 $ (0.12) $ (0.61) $ (0.64) $ (1.22)
Shares used in
computing per share:
Basic 355,345 351,596 340,744 349,489 345,027
Diluted 361,904 351,596 340,744 349,489 345,027
PRO FORMA ONLY
3Com Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
May 31, June 1,
2002 2001
------- -------
ASSETS
Current assets:
Cash and short-term investments $1,382,048 $1,640,211
Accounts receivable, net 147,113 290,883
Inventories, net 61,777 200,146
Other current assets 72,106 207,652
---------- ----------
Total current assets 1,663,044 2,338,892
Deferred income taxes 6,192 163,349
Property and equipment, net 676,154 609,679
Goodwill, intangibles, deposits,
and other assets 181,402 344,952
---------- ----------
Total assets $2,526,792 $3,456,872
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 125,903 $ 279,181
Other accrued liabilities 275,965 580,921
Deferred income taxes -- 80,485
Debt obligations 101,354 328
---------- ----------
Total current liabilities 503,222 940,915
Long-term debt and other 73,365 10,536
Stockholders' equity 1,950,205 2,505,421
---------- ----------
Total liabilities and
stockholders' equity $2,526,792 $3,456,872
========== ==========
Additional Comparative Financial Data
(in thousands)
(unaudited)
Sales by Geography
Three Months Ended
May 31, March 1, $ %
2002 2002 Change Change
---------- ---------- --------- ----------
Americas $ 158,046 $ 158,099 $ (53) 0%
EMEA 111,869 126,228 (14,359) -11%
Asia Pacific Rim 68,596 71,651 (3,055) -4%
---------- ---------- ---------
Total Sales $ 338,511 $ 355,978 $(17,467) -5%
========== ========== ========= ==========
Sales by Business
Three Months Ended
May 31, March 1, $ %
2002 2002 Change Change
---------- ---------- --------- --------
Business Connectivity
Company $ 97,835 $ 111,397 $(13,562) -12%
Business Networks
Company 195,977 191,453 4,524 +2%
CommWorks 43,713 51,789 (8,076) -16%
---------- ---------- ---------
Subtotal -
Ongoing Businesses 337,525 354,639 (17,114) -5%
Exited Product Lines 986 1,339 (353) -26%
---------- ---------- ---------
Total Sales $ 338,511 $ 355,978 $(17,467) -5%
========== ========== ========= ==========
Contribution Margin by Business
Three Months Ended
May 31, March 1, $ %
2002 2002 Change Change
---------- ---------- --------- ---------
Business Connectivity
Company(1) $ 20,565 $ (39,946) $ 60,511 151%
Business Networks
Company 39,120 2,685 36,435 1,357%
CommWorks(2) (22,373) (9,132) (13,241) 145%
----------- ---------- ---------
Subtotal -
Ongoing Businesses 37,312 (46,393) 83,705 180%
Exited Product Lines (8,818) (4,494) (4,324) 96%
----------- ---------- ---------
Total Contribution
Margin $ 28,494 $ (50,887) $ 79,381 156%
========== ========== ======== ==========
(1) The contribution margin for Business Connectivity Company for the three months ended March 1, 2002 includes a non-recurring charge of $51 million related to the write-down of an intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . (2) The contribution margin for CommWorks for the three months ended May 31, 2002 includes a non-recurring charge of $16 million related to the write-down of intangible assets. |
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