Avici Systems Announces First Quarter 2006 Results; Reports near record quarterly gross revenue and first profit before special charges.NORTH BILLERICA Billerica (bĭlrĭ`kə), town (1990 pop. 37,609), Middlesex co., NE Mass., on the Concord River; settled 1637, inc. 1655. An important high-tech center, its manufactures include computer hardware and software, precision instruments, and , Mass. -- Avici The Avici (sometimes Avichi) Hell is considered to be among the lowest realms of Hell within Buddhism. People reborn into this Hell have generally committed one or more of the Five Grave Offenses:
in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AVCI), today reported its first quarter results for the three months ended March 31, 2006. Gross revenue for the first quarter ended March 31, 2006 was $21.4 million compared to $10.7 million for the comparable three-month period ended March 31, 2005 and $6.1 million in the preceding quarter ended December December: see month. 31, 2005. Revenue, net of common stock warrant discount, for the March 2006 quarter was $20.9 million, compared to $10.2 million for the three months ended March 31, 2005 and $5.6 million in the December 2005 quarter. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss for the first quarter ended March 31, 2006 was $5.3 million, or $0.41 per share, compared to a GAAP net loss of $5.6 million, or $0.44 per share, in the prior year's first quarter. GAAP net loss for the three months ended March 31, 2006 includes $6.7 million of special charges associated with the company's recent decision to restructure its business and re-align
Re-align is the follow-up EP to Stromkern's Armageddon. It includes a cover of "Anthrax" originally by Gang of Four. its cost structure, and other non-cash equity based charges of $0.8 million. Special charges include $5.3 million of costs associated with the company's workforce reduction, the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of certain contract distribution rights deemed impaired See assistive technology. at March 31, 2006 and certain other costs associated with the company's decision to restructure its business and realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. its cost structure and an additional charge of $1.4 million for certain inventory considered in excess of anticipated future requirements. Other non-cash equity based charges include $0.3 million recognized upon the prospective adoption of Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Opinion 123R, which now requires that the fair values of stock options be expensed in the Company's GAAP financial statements, and $0.5 million for common stock warrant discount. This compares to a charge of $0.5 million in the prior year's first quarter ended March 31, 2005 for common stock warrant discount. GAAP net loss in each of the 2006 and 2005 three-month periods includes credits of $0.2 million for inventory utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be . Excluding these items, non-GAAP net income and net income per share for the three months ended March 31, 2006 was $2.0 million, or $0.15 per share, compared to a non-GAAP net loss of $5.2 million, or $0.41 per share, in the prior year quarter ended March 31, 2005. Cash, cash equivalents, short and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and restricted cash totaled $48.3 million at March 31, 2006. "Strong first quarter order volume coupled with the initial positive affects experienced from our business restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and cost structure re-alignment have resulted in Avici's highest quarterly revenue since mid- mid- pref. Middle: midbrain. 2001 and produced our first ever positive bottom line result, before special charges," said Bill Leighton Leighton is the name of a number of places:
Avici will discuss these quarterly results as well as future business and financial expectations in an investor conference call today at 8:30 AM eastern daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). savings time. The conference telephone number is (877) 209-0397. A replay of the conference call will be available after 11:15 AM. Replay information will be available at (800) 475-6701 (USA) and (320) 365-3844 (International), access code: 825121. Replay of this call is also available on Avici's Web site, www.avici.com, along with a copy of this release. Avici is a trademark of Avici Systems Inc. About Avici Systems Avici Systems Inc., headquartered in North Billerica, Mass., is a leading provider of purpose-built purpose-built Adjective made to serve a specific purpose Adj. 1. purpose-built - designed and constructed to serve a particular purpose purpose-made carrier-class routing solutions for 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 . Avici's family of routers is designed to meet carrier requirements for the highest scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it , reliability and network availability, while lowering the total cost of building and operating their networks. The company's routing systems provide new IP solutions to some of the world's leading service providers. For more information, please visit us at www.avici.com. This release contains information about Avici's future expectations, plans, and prospects, including Avici's expectations for annual gross revenues that constitute 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. for purposes of the 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. provisions under 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. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Statements made with regard to interim results are not necessarily indicative indicative: see mood. of results that may be expected for future interim periods or for the full year. When used in this press release, the word "will", "expected" and other similar expressions are intended to identify such forward looking statements. Such risks and uncertainties include, but are not limited to, the impact of restructuring and realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. , the amount and timing of the occurrence of related charges, risks associated with focusing on a core set of features and functionalities, market acceptance of Avici products, services and enhancements, dependence on our major customer, customer purchasing patterns and commitments, development of the market place, product development and enhancement, intensity of competition of other vendors, technological changes, reliance on distribution partners, risks associated with international expansion, and other risks set forth in Avici's filings with the Securities and Exchange Commission. Avici does not undertake any duty to update forward-looking statements.
AVICI SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(Unaudited)
Three Months Ended
March 31,
----------------------
2006 2005
----------------------
Revenue:
Product $20,279 $9,525
Service 1,115 1,195
----------------------
Total gross revenue 21,394 10,720
Less - Common stock warrant discount - Product (527) (527)
----------------------
Net revenue 20,867 10,193
----------------------
Cost of revenue - Product (1) 8,241 3,286
Cost of revenue - Service 506 593
----------------------
Total cost of revenue 8,747 3,879
----------------------
Gross margin 12,120 6,314
----------------------
Operating expenses:
Research and development (2) 9,604 8,660
Sales and marketing (2) 1,431 2,310
General and administrative (2) 1,299 1,310
Stock-based compensation 255 -
Restructuring expenses 5,272 -
----------------------
Total operating expenses 17,861 12,280
----------------------
Loss from operations (5,741) (5,966)
Interest income, net 419 363
----------------------
Net loss $(5,322) $(5,603)
======================
Net loss per basic and diluted share $(0.41) $(0.44)
======================
Weighted average common shares used in
computing basic and diluted net loss per
share 12,939,415 12,854,485
======================
(1) Includes inventory charge and (credits),
as follows:
Inventory charge $1,382 -
======================
Credits from utilization of inventory
previously written off in 2001 $(153) $(163)
======================
(2) Excludes certain non-cash, stock-based
compensation, as follows:
Research and development $130 $-
======================
Sales and marketing 36 -
======================
General and administration 89 -
----------------------
$255 $-
======================
AVICI SYSTEMS INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(Unaudited)
Note 1
Three Months Ended
March 31,
======================
2006 2005
======================
Revenue:
Product $20,279 $9,525
======================
Service 1,115 1,195
======================
Total gross revenue 21,394 10,720
======================
Cost of revenue - Product 7,012 3,449
======================
Cost of revenue - Service 506 593
======================
Total cost of revenue 7,518 4,042
======================
Gross margin 13,876 6,678
======================
Operating expenses:
Research and development 9,604 8,660
======================
Sales and marketing 1,431 2,310
======================
General and administrative 1,299 1,310
======================
Total operating expenses 12,334 12,280
======================
Income/(loss) from operations 1,542 (5,602)
======================
Interest income, net 419 363
======================
Non-GAAP net income/(loss) $1,961 $(5,239)
======================
Non-GAAP earnings/(loss) per diluted share $0.15 $(0.41)
======================
Weighted average common shares used in
computing diluted net loss per share 12,987,949 12,854,485
======================
Note 1 - The above non-GAAP consolidated statements of operations for
the three months ended March 31, 2006 and 2005 are not presented in
accordance with generally accepted accounting principles (GAAP) and
are presented for informational purposes only. These statements
exclude the impact of restructuring expenses, non-cash charges related
to common stock warrant discount and certain stock based compensation
as well as charges and credits related to excess inventory as
presented in the following reconciliation for the applicable periods.
The Company believes that this presentation of non-GAAP results
provides helpful information to both management and investors in
assessing our core operating performance. Such information should not
be considered superior to, in isolation from, or as a substitute for
results presented in accordance with generally accepted accounting
principles.
======================================================================
Three Months Ended
March 31,
======================
2006 2005
======================
Non-GAAP net income/(loss) $1,961 $(5,239)
======================
Common stock warrant discount (527) (527)
======================
Restructuring expenses (5,272) -
======================
Certain non-cash stock based compensation (255) -
======================
Inventory charge (1,382) -
======================
Utilization of inventory previously written-off 153 163
======================
GAAP net loss $(5,322) $(5,603)
======================
AVICI SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
March 31, Dec. 31,
2006 2005
===================
(unaudited)
===========
Assets
Cash and marketable securities $47,335 $48,120
===================
Inventories 4,778 8,172
===================
Trade accounts receivable, net 8,139 6,122
===================
Restricted cash 1,000 -
===================
Other current assets 1,043 1,501
===================
Total current assets 62,295 63,915
===================
Long-term investments - 2,099
===================
Property and equipment, net 8,148 9,306
===================
Contract distribution rights - 2,107
===================
Other non-current assets 243 243
===================
Total assets $70,686 $77,670
===================
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $10,735 $11,510
===================
Deferred revenue 12,619 13,970
===================
Stockholders' equity 47,332 52,190
===================
Total liabilities and stockholders' equity $70,686 $77,670
===================
December 31, 2005 amounts are derived
from audited financial statements.
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