Avici Systems Announces Second Quarter Results.Business/Technology Editors 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.--(BUSINESS WIRE)--July 24, 2002 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), the specialist in reliable and scalable 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 , today reported its second quarter results for the period ended June June: see month. 30, 2002. Gross revenue for the second quarter ended 2002 was $9.3 million compared with $9.2 million in the previous quarter and $21.4 million in the prior year's second quarter ended June 30, 2001, a 56.5% decline. Revenue, net of common stock warrant discount for those periods was $8.5 million, $8.4 million and $20.6 million, respectively. 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 net loss and pro forma net loss per share was $15.1 million or $0.30 per share for the quarter ended June 30, 2002, compared to $11.5 million or $0.23 per share in the prior year's second quarter ended June 30, 2001. Actual net loss and actual net loss per share which includes non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to equity issuances In financial markets, an Equity Issuance is the sale of new equity or "stocks" by a firm to investors. Equity Issuance can involve a private sale, in which the transaction between investors and the firm takes place directly, or publicly, in which case the firm has to , and in the second quarter of 2002, credits resulting from the 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 of inventory previously considered to be in excess, and a gain on the settlement of an insurance claim was $15.5 million or $0.31 per share for the quarter ended June 30, 2002 compared to $15.9 million or $0.32 per share, in the 2001 comparable period. Gross revenue for the six months ended June 30, 2002 was $18.6 million compared with $37.1 million for the same period last year. Revenue, net of common stock warrant discount for those periods was $16.9 million, and $35.5 million, respectively. Pro forma net loss and pro forma net loss per share for the first six months of 2002 was $30.6 million or $0.62 per share compared to $23.3 million or $0.48 per share for the same six month period in 2001. Actual net loss and actual net loss per share for the six months ended June 30, 2002 was $34.0 million or $0.68 per share compared to $33.1 million or $0.68 per share for the same six month period in 2001. Cash, 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 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. investments totaled $138.5 million at June 30, 2002. "During this turbulent time in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry, Avici continues to execute on product innovation for our customers", said Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Kaufman, 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. . "This quarter we introduced new NSR NSR abbr. normal sinus rhythm NSR Normal sinus rhythm, see there (non-stop non-stop non adj → ununterbrochen; (flight) → Nonstop-, Non-Stop- adv → ununterbrochen; [fly] → routing) technology to help carriers improve the profitability of their IP networks." 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. 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. Avici, TSR (Terminate and Stay Resident) Refers to a program that remains in memory when the user exits it in order that it be immediately available at the press of a hotkey. and SSR (Scalable Sampling Rate) See AAC. SSR - Scalable Sampling Rate are trademarks of Avici Systems Inc. This release contains information about Avici's future expectations, plans, and prospects 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. 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, market acceptance of Avici products, services and enhancements, customer purchasing patterns and commitments, development of the market place, product development and enhancement, intensity of competition of other vendors, technological changes and other risks set forth in Avici's filings with the Securities and Exchange Commission. -O-
AVICI SYSTEMS INC.
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(unaudited)
Note 1
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Gross revenue $9,344 $21,414 $18,571 $37,125
Cost of revenue 5,494 11,772 11,395 20,749
Gross margin 3,850 9,642 7,176 16,376
Operating expenses:
Research and
development 14,178 15,862 28,591 30,970
Sales and marketing 3,811 5,279 7,507 10,326
General and
administrative 1,968 2,514 3,848 4,822
Total operating
expenses 19,957 23,655 39,946 46,118
Pro forma loss from
operations (16,107) (14,013) (32,770) (29,742)
Interest income, net 1,038 2,551 2,139 6,452
Pro forma net loss $(15,069) $(11,462) $(30,631) $(23,290)
Pro forma basic and
diluted net loss
per share $(0.30) $ (0.23) $ (0.62) $ (0.48)
Weighted average common
shares used in computing
pro forma net loss
per share:
49,820,329 49,207,321 49,788,030 48,962,680
Note 1 - The above pro forma consolidated statements of operations
for the three and six month periods ended June 30, 2002 and June 30,
2001, are not presented in accordance with generally accepted
accounting principles as they exclude charges for equity issuances,
credits related to the utilization of inventory previously estimated
to be in excess of foreseeable requirements, and a gain from the
settlement of an insurance claim as follows (in thousands):
Three months ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Common stock
warrant discount $ 816 $ 816 $ 1,633 $ 1,633
Non-cash stock
based compensation 1,642 3,633 3,705 8,138
Utilization of
excess inventory (1,696) -- (1,696) --
Gain from insurance
settlement (285) -- (285) --
Total $ 477 $ 4,449 $ 3,357 $ 9,771
AVICI SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
Gross Revenue $9,344 $21,414 $18,571 $37,125
Less - Common stock
warrant discount (816) (816) (1,633) (1,633)
Net revenue 8,528 20,598 16,938 35,492
Cost of revenue (1) 3,798 11,772 9,699 20,749
Gross margin 4,730 8,826 7,239 14,743
Operating expenses:
Research and
development (2) 14,178 15,862 28,591 30,970
Sales and
marketing (2) 3,811 5,279 7,507 10,326
General and
administrative (2) 1,968 2,514 3,848 4,822
Stock-based
compensation 1,642 3,633 3,705 8,138
Total operating
expenses 21,599 27,288 43,651 54,256
Loss from operations (16,869) (18,462) (36,412) (39,513)
Interest income, net 1,038 2,551 2,139 6,452
Other income 285 -- 285 --
Net loss $(15,546) $(15,911) $(33,988) $(33,061)
Net loss per share:
Basic and diluted $(0.31) $ (0.32) $ (0.68) $ (0.68)
Weighted average
common shares used in
computing net loss per
share:
Basic and diluted 49,820,329 49,207,321 49,788,030 48,962,680
(1) Cost of revenue for the three and six month periods ended June
30, 2002 includes a credit of $1,696 to recognize the utilization of
fully reserved inventory previously estimated to be in excess of
foreseeable requirements.
(2) Excludes noncash, stock-based compensation,
as follows:
Research and
development $ 996 $2,328 $2,289 $5,227
Sales and
marketing 394 997 871 2,162
General and
administrative 1968 2514 3848 4822
$1,642 $3,633 $3,705 $8,138
AVICI SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2002 2001
(unaudited)
Assets
Cash and marketable securities $ 91,886 $128,935
Trade accounts receivable 7,202 2,830
Inventories 3,091 8,109
Other current assets 2,393 2,635
Total current assets 104,572 142,509
Property and equipment, net 36,146 41,728
Long Term Investments 46,659 35,506
Other assets 534 534
Total assets $187,911 $220,277
Liabilities and Stockholders' Equity
Accounts payable and
accrued expenses $ 12,756 $ 15,264
Deferred revenue 8,249 8,254
Current maturities of
long-term obligations 1,340 2,319
Long-term obligations 293 753
Stockholders' equity 165,273 193,687
Total liabilities and
Stockholders' equity $187,911 $220,277
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