Avici Systems Reports Fourth Quarter and Full Year Results; Quarterly and Annual Revenues Increase, Loss Narrows.Business Editors/High-Tech Writers 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)--Jan. 29, 2004 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 fourth quarter and full year results for the periods ended December December: see month. 31, 2003. Gross revenue for the fourth quarter and full year ended December 31, 2003 was $11.5 million and $39.4 million, respectively, compared to $7.3 million and $33.1 million in the comparable periods ended December 31, 2002, representing an increase of 57.5% compared to the prior year's fourth quarter and an annual increase of 19%. Revenue, net of common stock warrant discount, for the three and twelve month periods ended December 31, 2003 was $11.5 million and $37.0 million, respectively, compared to $6.5 million and $29.9 million for the same periods last year. Common stock warrant discount associated with a previous transaction has been reported as a reduction of gross revenue during the three year period ended September September: see month. 30, 2003 and was fully amortized at that date. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss for the fourth quarter ended December 31, 2003 was $3.9 million, or $0.32 per share compared to a GAAP net loss of $14.1 million, or $1.13 per share in the prior year fourth quarter. GAAP net loss for the 2003 and 2002 fourth quarters includes $0.1 million and $1.5 million, respectively, for non-cash equity based charges, a credit of $0.5 million in the fourth quarter of 2003 for 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 certain inventory previously estimated to be in excess of foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. requirements, and other income of $3.0 million related to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of certain customer credits. GAAP net loss and net loss per share for the year ended December 31, 2003 were $37.0 million, or $3.02 per share compared to $64.8 million, or $5.20 per share for the comparable year ended December 31, 2002. GAAP net loss for the 2003 and 2002 annual periods includes $3.5 million and $7.4 million, respectively for non-cash equity based charges, credits of $1.9 million and $2.5 million, respectively for the utilization of certain inventory previously estimated to be in excess of foreseeable requirements, and in 2003, other income of $3.0 million related to the expiration of certain customer credits, and in 2002, 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. of $0.9 million and a $0.3 million credit from the settlement of an insurance claim. Non-GAAP net loss (GAAP net loss excluding the above charges and credits) and net loss per share for the three months ended December 31, 2003 and 2002 were $7.3 million, or $0.60 per share compared to $12.6 million, or $1.01 per share, respectively. Non-GAAP net loss and net loss per share for the year ended December 31, 2003 were $38.4 million, or $3.14 per share compared to $59.2 million or $4.76 per share for the prior year ended December 31, 2002. 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. marketable securities totaled $96 million at December 31, 2003. Total utilization of these items for 2003 was $29 million, reduced from $39 million in 2002. "This was a strong quarter for Avici," 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. . "We are pleased with the progress we have made in 2003, broadening broad·en tr. & intr.v. broad·ened, broad·en·ing, broad·ens To make or become broad or broader. broad our global channels and partnerships, innovating for customers, and improving our financial performance." Avici will discuss these results in an investor conference call today at 8:30 AM EST EST electroshock therapy. EST abbr. electroshock therapy . The conference telephone number is 888-273-9885. A replay of the conference call will be available after 1 PM. Replay information will be available at 800-475-6701, access code: 717293. Replay of this call is also available on Avici's Web site, www.avici.com, along with a copy of this release. 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. Avici is a trademark 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.
AVICI SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(unaudited)
Three Months Ended Years Ended
December 31, December 31,
2003 2002 2003 2002
Revenue:
Product $10,292 $6,343 $35,135 $29,388
Service 1,226 965 4,281 3,756
Total gross revenue 11,518 7,308 39,416 33,144
Less - Common stock
warrant discount
- Product - (816) (2,451) (3,266)
Net revenue 11,518 6,492 36,965 29,878
Cost of revenue -
Product (1) 2,968 3,504 11,606 15,133
Cost of revenue - Service 735 691 3,053 2,272
Total cost of revenue 3,703 4,195 14,659 17,405
Gross margin 7,815 2,297 22,306 12,473
Operating expenses:
Research and
development (2) 10,821 11,915 46,483 55,844
Sales and marketing (2) 2,742 2,770 10,863 13,462
General and
administrative (2) 1,428 1,736 6,077 7,178
Stock-based
compensation 132 708 1,022 4,111
Restructuring charges - - - 925
Total operating
expenses 15,123 17,129 64,445 81,520
Loss from operations (7,308) (14,832) (42,139) (69,047)
Interest income, net 444 742 2,151 3,982
Other income 2,957 - 2,957 285
Net loss $(3,907) $(14,090) $(37,031) $(64,780)
Net loss per basic
and diluted share $ (0.32) $(1.13) $ (3.02) $ (5.20)
Weighted average
common shares used
in computing basic
and diluted net loss
per share 12,194,289 12,447,171 12,248,606 12,456,221
(1) Includes benefit
from the utilization
of inventory
previously written
off in 2001 as being
in excess of demand $ 532 $ - $ 1,910 $ 2,468
(2) Excludes non-cash,
stock-based
compensation, as
follows:
Research and
development $128 $458 $668 $2,507
Sales and
marketing 13 113 181 762
General and
administration (9) 137 173 842
$132 $708 $1,022 $4,111
AVICI SYSTEMS INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(unaudited)
Note 1
Three Months Ended Years Ended
December 31, December 31,
2003 2002 2003 2002
Revenue:
Product $10,292 $6,343 $35,135 $29,388
Service 1,226 965 4,281 3,756
Total gross revenue 11,518 7,308 39,416 33,144
Cost of revenue - Product 3,500 3,504 13,516 17,601
Cost of revenue - Service 735 691 3,053 2,272
Total cost of revenue 4,235 4,195 16,569 19,873
Gross margin 7,283 3,113 22,847 13,271
Operating expenses:
Research and
development 10,821 11,915 46,483 55,844
Sales and
marketing 2,742 2,770 10,863 13,462
General and
administrative 1,428 1,736 6,077 7,178
Total operating
expenses 14,991 16,421 63,423 76,484
Loss from operations (7,708) (13,308) (40,576) (63,213)
Interest income, net 444 742 2,151 3,982
Non-GAAP net loss $(7,264) $(12,566) $(38,425) $(59,231)
Non-GAAP net loss per
basic and diluted
share $ (0.60) $ (1.01) $ (3.14) $ (4.76)
Weighted average
common shares used
in computing basic
and diluted net loss
per share 12,194,289 12,447,171 12,248,606 12,456,221
Note 1 - The above non-GAAP consolidated statements of operations
for the three and twelve months ended December 31, 2003 and December
31, 2002 are not presented in accordance with generally accepted
accounting principles (GAAP) and are presented for informational
purposes only. These statements exclude the impact of non-cash charges
related to common stock warrant discount and stock based compensation
as well as restructuring charges, certain credits resulting from
utilization of excess inventory and gains from expiration of customer
credits and insurance settlement as presented in the following
reconciliation. The Company believes that this presentation of
non-GAAP results provides helpful information to both management and
investors in assessing our operating performance.
Three months ended Years ended
December 31, December 31,
2003 2002 2003 2002
Non-GAAP net loss $(7,264) $(12,566) $(38,425) $(59,231)
Common stock warrant
discount - (816) (2,451) (3,266)
Non-cash stock based
compensation (132) (708) (1,022) (4,111)
Utilization of excess
inventory 532 - 1,910 2,468
Expiration of
customer credits 2,957 - 2,957 -
Gain from insurance
settlement - - - 285
Restructuring charges - - - (925)
GAAP net loss $(3,907) $(14,090) $(37,031) $(64,780)
AVICI SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
December 31, December 31,
2003 2002
(unaudited)
Assets
Cash and marketable securities $63,614 $82,832
Inventories, net 1,206 1,147
Trade accounts receivable, net 6,620 2,593
Other current assets 1,200 1,364
Total current assets 72,640 87,936
Long-term investments 32,316 42,257
Property and equipment, net 10,658 27,438
Other assets 432 523
Total assets $116,046 $158,154
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $13,084 $12,531
Deferred revenue 2,689 9,973
Current portion of capital lease
obligations 46 707
Long-term liabilities -- 46
Stockholders' equity 100,227 134,897
Total liabilities and
stockholders' equity $116,046 $158,154
December 31, 2002 amounts are derived from
audited financial statements.
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