Avici Systems Reports Fourth Quarter and Full Year Results; Reduction in Quarterly Loss.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. 30, 2003 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 fourth quarter and full year results for the periods ended December December: see month. 31, 2002. Gross revenue for the fourth quarter and full year ended December 31, 2002 was $7.3 million and $33.1 million, respectively, compared to $9.2 million and $56.6 million in the comparable periods ended December 31, 2001. Revenue, net of common stock warrant discount, for the three and twelve month periods ended December 31, 2002 was $6.5 million and $29.9 million, respectively, compared to $8.4 million and $53.4 million for the same periods last year. Net loss for the fourth quarter ended December 31, 2002 was $14.3 million, or $1.15 per share compared to a net loss of $21.2 million, or $1.71 per share in the prior year fourth quarter. Net loss for the 2002 and 2001 fourth quarters includes $1.7 million and $5.0 million, respectively, for non-cash equity expenses and in the 2001 period, a 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). credit of $0.1 million. Net loss and net loss per share for the fourth quarters of 2002 and 2001 before these charges and credit were $12.6 million, or $1.01 per share compared to $16.3 million, or $1.31 per share, respectively. Cash, securities 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 $125.1 million at December 31, 2002. For the full year ended December 31, 2002, net loss and net loss per share were $66.7 million, or $5.35 per share compared to $95.5 million, or $7.75 per share for the year ended December 31, 2001. Net loss for the 2002 annual period includes restructuring and non-cash equity issuance 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 charges of $10.2 million, or $0.82 per share, offset by credits of $2.8 million, or $0.22 per share, primarily for 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 previously written down inventory. All per share data has been restated to give effect to a one for four reverse stock split which became effective on November November: see month. 12, 2002. "This quarter we continued to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on innovation by delivering a new generation of technology for the industry's most scalable and reliable routers. Our improving bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. results stem from continued cost controls in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of a challenging market," 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. . 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, timely 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 Year ended
December 31, December 31,
2002 2001 2002 2001
Gross Revenue $7,308 $9,216 $33,144 $56,643
Less - Common stock
warrant discount (817) (817) (3,267) (3,267)
Net revenue 6,491 8,399 29,877 53,376
Cost of revenue (1) 4,195 6,131 17,404 51,973
Gross margin 2,296 2,268 12,473 1,403
Operating expenses:
Research and
development (2) 11,915 14,183 55,844 61,527
Sales and marketing (2) 2,771 4,626 13,463 19,818
General and
administrative (2) 1,735 2,044 7,178 9,538
Stock-based
compensation 925 4,142 5,996 15,003
Restructuring
charges -- (72) 925 1,062
Total operating
expenses 17,346 24,923 83,406 106,948
Loss from operations (15,050) (22,655) (70,933) (105,545)
Interest income, net 743 1,461 3,982 10,053
Other income -- -- 285 --
Net loss $(14,307) $(21,194) $(66,666) $(95,492)
Net loss per share:
Basic and diluted $(1.15) $(1.71) $(5.35) $(7.75)
Weighted average
common shares used in
computing net loss
per share:
Basic and diluted 12,447,171 12,405,358 12,456,140 12,314,577
(1) Cost of revenue for the year ended December 31, 2002 includes a
credit of $2,468 to recognize the utilization of inventory
previously estimated to be in excess of foreseeable requirements.
Cost of revenue for the year ended December 31, 2001 includes a
charge of $17,165 for obsolete and excess inventory.
(2) Excludes noncash,
stock-based
compensation, as
follows:
Research and
development $592 $2,663 $3,713 $9,698
Sales and
marketing 184 1,043 1,349 3,895
General and
administrative 149 436 934 1,410
$ 925 $ 4,142 $ 5,996 $ 15,003
AVICI SYSTEMS INC.
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(unaudited)
Note 1
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Gross revenue $7,308 $9,216 $33,144 $56,643
Cost of revenue 4,195 6,131 19,872 34,808
Gross margin 3,113 3,085 13,272 21,835
Operating expenses:
Research and
development 11,915 14,183 55,844 61,527
Sales and marketing 2,771 4,626 13,463 19,818
General and
administrative 1,735 2,044 7,178 9,538
Total operating
expenses 16,421 20,853 76,485 90,883
Pro forma loss from
operations (13,308) (17,768) (63,213) (69,048)
Interest income, net 743 1,461 3,982 10,053
Pro forma net loss $(12,565) $(16,307) $(59,231) $(58,995)
Pro forma basic
and diluted net
loss per share $(1.01) $(1.31) $(4.76) $(4.79)
Weighted average common
shares used in
computing pro forma
net loss per share: 12,447,171 12,405,358 12,456,140 12,314,577
Note 1 - The above pro forma consolidated statements of operations for
the three months and years ended December 31, 2002 and December 31,
2001 are not presented in accordance with generally accepted
accounting principles (GAAP) as they exclude the following (in
thousands):
Three months ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Pro forma net loss $(12,565) $(16,307) $(59,231) $(58,995)
Common stock warrant
discount (817) (817) (3,267) (3,267)
Non-cash stock based
compensation (925) (4,142) (5,996) (15,003)
(Charge) credit for
utilization of
(provision for)
excess inventory -- -- 2,468 (17,165)
Restructuring (charges)
credits -- 72 (925) (1,062)
Gain from insurance
settlement -- -- 285 --
GAAP net loss $(14,307) $(21,194) $(66,666) $(95,492)
AVICI SYSTEMS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2002 2001
(1)
Assets
Cash and marketable securities $82,833 $128,935
Inventories, net 1,147 8,109
Trade accounts receivable, net 2,592 2,830
Other current assets 1,364 2,635
Total current assets 87,936 142,509
Long Term Investments 42,257 35,506
Property and equipment, net 27,438 41,728
Other assets 523 534
Total assets $158,154 $220,277
Liabilities and Stockholders' Equity
Accounts payable and
accrued expenses $12,532 $15,264
Deferred revenue 9,972 8,254
Current portion of capital
lease obligations 707 2,319
Long term liabilities 47 753
Stockholders' equity 134,896 193,687
Total liabilities and
Stockholders' equity $158,154 $220,277
(1) Derived from audited financial statements.
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