Accord Networks Reports a 66% Revenue Increase, 176% Increase in Operating Income, and 526% Increase in Net Income for the Third Quarter of 2000.Business Editors ATLANTA--(BUSINESS WIRE)--Oct. 30, 2000 Accord Networks Ltd. (Nasdaq: ACCD ACCD Alamo Community College District (Texas) ACCD Art Center College of Design (Los Angeles, California) ACCD Alberta Committee of Citizens with Disabilities (Canada) ) -- Revenue and Operating Income Achieved Record Levels in Third Quarter -- Product Gross Margin Above 75 Percent Accord Networks Ltd. (Nasdaq: ACCD), the leading developer and manufacturer of visual and voice networking products including the V2IPERA(TM) family - a product line of network switches, conference bridges, gateways and management systems - that empowers Rich Media Communications over IP, ATM and ISDN ISDN in full Integrated Services Digital Network Digital telecommunications network that operates over standard copper telephone wires or other media. networks, today announced record results for the third quarter ended September September: see month. 30, 2000. For the third quarter ended September 30, 2000, revenues were $10.9 million, a 66 percent increase compared with $6.5 million for the third quarter of 1999. North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. revenues represented 70 percent of total third quarter revenues with 30 percent generated in the rest of the world which is in line with the Company's expectation. These results compare with 82 percent of revenues coming from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and 18 percent from the rest of the world during the second quarter of 2000. Third quarter 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. of $552,000 grew 176 percent from $200,000 in the third quarter of 1999. Net income for the third quarter of 2000 was $1,339,000, or 526 percent higher than 1999 third quarter net income of $214,000. Third quarter diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $.06 exceeded analysts' mean estimate of $.04, which had been raised from a mean estimate of $.03 earlier this year, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. First Call. For the nine-month period ended September 30, 2000, Accord Networks' revenues grew by 70 percent to $28.7 million from $16.9 million in the first nine months in 1999. 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 operating income for the first nine months of 2000 increased 554 percent to $1,209,000 compared with $185,000 in the corresponding period a year ago. Pro Forma net income of $1,948,000 compared with $152,000 achieved in the nine-month period last year. Nine-month Pro Forma results exclude a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $6.5 million for the settlement of a lawsuit lawsuit: see procedure; tort. in the second quarter of 2000. Jules L. DeVigne, Chairman 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. of Accord Networks, stated, "We are very pleased with the results of our third quarter which is a continuation of our ability to grow our financial results. Significant growth was realized through increased demand for our IP voice and visual communications products. In addition, we have strengthened our leadership position through new product offerings, new customers, new partners, and we continue to see major opportunities for our products on a worldwide basis. Accord remains financially strong with over $57 million in cash, cash equivalents, 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 as of September 30." To enhance the Company's growth prospects and offer more advanced solutions, in the third quarter, Accord announced the V2IPERA product family and the V2GC-20 Firewall Gateway. V2IPERA is the product family that consists of a suite of products that addresses complex IP voice and video networking opportunities. The Firewall Gateway is a major technological advancement allowing customers, for the first time, to securely add voice and video to their IP networks without compromising existing firewall security. Also this quarter, Accord began working with Microsoft to develop what Accord believes to be the first voice and visual communications capabilities to be integrated into Microsoft Outlook For the e-mail and news client bundled with certain versions of Microsoft Windows, see . Microsoft Outlook or Outlook (full name Microsoft Office Outlook and Exchange Server. Accord anticipates that Microsoft Outlook users will have the ability to have point-and-click access to Accord's technology for IP voice and visual communications. In addition, Accord announced NEBS-compliancy (Network Equipment Building Systems) this quarter. NEBS NEBS Network Equipment Building System (Bell Telephone Labs) NEBS Network Equipment Building Standards NEBS New England Business Services NEBS New England Barbecue Society NEBS Neue Europäische Bewegung Schweiz is a standard from Bellcore that many service providers consider mandatory in order to place network equipment in the Central Office or local Point of Presence (POP). NEBS has become increasingly important in the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the communications market as more and more "new generation" service providers, including ISPs , ASPs and CLECs -- who often co-locate their equipment in Central Offices and local POPs -- are emerging at an increasing rate and looking to provide visual and voice services. During the quarter, Accord's installed base continued to grow. Some of the Company's orders this quarter were from AT&T, Bank of China, Bell Atlantic, Boeing, Cincinnati Bell Cincinnati Bell is the dominant telephone company for Cincinnati, Ohio and its nearby suburbs in Ohio, Indiana and Kentucky. The parent company is named Cincinnati Bell Inc. , Deutsche Telecom, Marconi, Mitre Corp., National Guard, OARnet, Ohio State University Ohio State University, main campus at Columbus; land-grant and state supported; coeducational; chartered 1870, opened 1873 as Ohio Agricultural and Mechanical College, renamed 1878. There are also campuses at Lima, Mansfield, Marion, and Newark. , and Robertson Stephens among many others.
ACCORD NETWORKS LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
Actual Pro Forma Actual
2000 1999 2000 2000 1999
-------- -------- -------- -------- --------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
REVENUES : -------- -------- -------- -------- -------
Product sales $ 10,021 $ 6,180 $ 26,789 $ 26,789 $ 16,002
Support revenues 853 354 1,915 1,915 908
-------- -------- -------- -------- --------
Total revenues 10,874 6,534 28,704 28,704 16,910
-------- -------- -------- -------- --------
COST OF REVENUES:
Product sales 2,444 1,460 6,334 6,334 3,615
Support 746 566 2,167 2,167 1,491
-------- -------- -------- -------- --------
Total cost of
revenues 3,190 2,026 8,501 8,501 5,106
-------- -------- -------- -------- --------
GROSS PROFIT 7,684 4,508 20,203 20,203 11,804
OPERATING EXPENSES:
Research &
development, net 2,220 1,095 5,473 5,473 3,065
Selling &
marketing 3,118 1,982 9,173 9,173 5,635
General &
administrative 1,794 1,231 4,348 4,348 2,919
Litigation
settlement costs 6,500
-------- -------- -------- -------- --------
Total operating
expenses 7,132 4,308 18,994 25,494 11,619
-------- -------- -------- -------- --------
OPERATING INCOME
(LOSS) 552 200 1,209 (5,291) 185
INTEREST AND OTHER
EXPENSES, net 787 14 739 739 (33)
-------- -------- -------- -------- --------
NET INCOME (LOSS)
FOR THE PERIOD 1,339 $ 214 $ 1,948 (4,552) $ 152
======== ======== ======== ======== ========
Earning (loss)
per share:
Basic $ .07 $ .17 $ .24 $ (.57) $ .12
======== ======== ======== ======== ========
Diluted $ .06 $ .01 $ .10 $ (.57) $ .01
======== ======== ======== ======== ========
Weighted average
number of shares
outstanding during
the period:
Basic 20,238,653 1,277,891 7,995,617 7,995,617 1,277,343
========== ========= ========= ========= =========
Diluted 23,368,478 17,263,448 19,687,930 7,995,617 15,407,378
========== ========== ========== ========== ==========
Note: The difference between the Pro Forma and Actual column is
the treatment of the $6.5 million settlement. The settlement is
excluded in the Pro Forma column and appears as an operating expense
in the Actual column.
ACCORD NETWORKS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30,
2000
------------
(Unaudited)
A S S E T S
CURRENT ASSETS:
Cash, cash equivalents, and short-term investments $ 57,605
Accounts and note receivable:
Trade accounts receivable, net of allowance
for doubtful accounts of $263 at September 30, 2000 6,477
Trade note receivable, net of allowance for doubtful
accounts of $213 at September 30, 2000 404
Other 2,349
Inventories 7,338
Prepaid expenses and other current assets 1,154
------------
T o t a l current assets 75,327
-----------
FIXED ASSETS:
Cost 6,862
Less - accumulated depreciation and amortization 2,200
-----------
Total fixed assets 4,662
-----------
OTHER ASSETS 1,425
-----------
TOTAL ASSETS $ 81,414
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable and accruals:
Trade 3,685
Payables in connection with settlement agreement 6,000
Other 5,420
--------
Total current liabilities 15,105
LONG-TERM LIABILITIES:
Accrued severance pay 1,250
Other 27
--------
Total liabilities 16,382
--------
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value 58
Warrants and options 178
Additional paid-in capital 82,130
Unrealized Loss on Securities Available for Sale (62)
Accumulated deficit (17,272)
--------
Total common stockholders' 65,032
--------
TOTAL Liabilities and Shareholders' Equity $ 81,414
========
Accord Networks Accord Networks is a leading, manufacturer and distributor of the Accord MGC MGC Mammalian Gene Collection MGC Media Gateway Controller MGC Middle Georgia College MGC Museums and Galleries Commission (UK government) MGC Mississippi Gaming Commission MGC Manual Gain Control product family, an advanced product line of network switches, gateways and management systems that provide comprehensive solutions for real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. , point-to-point and multipoint visual, voice and data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. over networks that utilize the 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. , as well as ATM and ISDN networks. The MGC family includes the MGC-100(TM), MGC-50(TM), MGC WebCommander(TM), MGC Manager(TM) and Virtual Conference Suite. The MGC-100 and MGC-50 are known for their unprecedented multipoint, point-to-point and gateway functionality, scaleable architecture, advanced feature set, ease of maintenance and single platform multi-network connectivity. The Accord MGC management solutions empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems the user with easy call set-up, control and diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler over the Web. The MGC-100 and MGC-50 are cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to solutions that connect an array of real-time communication devices including POTS/PSTN telephones, Internet telephones, conference-ready PCs and TV set-top units, as well as high-end conferencing See teleconferencing. systems. Accord has partnered with leading end-point manufacturers and system integrators See systems integrator. whose products and services, when combined with the MGC family, provide business enterprises, medical and educational institutions and government agencies with a broad range of visual, voice and data solutions. Such solutions include business conferencing, distance learning and telemedicine ("long distance" medicine) Using a videoconferencing link to a large medical center in order that rural health care facilities can perform diagnosis and treatment. A specialist can monitor the patient remotely taking cues from the general practitioner or nurse who is actually examining applications on a worldwide basis. The MGC family is also ideally suited for Service Providers including newer generation ISPs, ASPs and CLECs. The family enables service providers to deliver traditional applications as well as new valued-added visual and voice communications services - such as visual e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. , visually enabled call centers, visual chat rooms and voice over IP - across broadband access See broadband and wireless broadband. networks like xDSL and cable modems cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. . For more information visit the Accord web site at www.accordnetworks.com. Accord is a registered trademark of Accord Networks. MGC-100, MGC-50, MGC WebCommander, and MGC Manager are trademarks of Accord Networks. The information contained in this press release contains 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 Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995) regarding the future performance of the Company, including representations about opportunities for growth, the success of recently announced products, and the integration of Accord's products with Microsoft products. These forward-looking statements reflect management's expectations and are based upon currently available data. These statements are not guarantees of performance and are inherently subject to risks and uncertainties, many of which cannot be predicted or anticipated. Future events and actual results, financial or otherwise, could differ materially from those contained herein. Important factors that could cause actual results to differ materially from the Company's expectations include competitive activity, delays in the integration of Accord's products with those of Microsoft, general business conditions in the industry, changes in demand for products, the timing and amount or cancellation of orders and other factors detailed from time to time in Accord's filings with the Securities and Exchange Commission. Copies of such filings are also available upon request. |
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