Cabletron Systems Announces First Quarter Results.ROCHESTER Rochester (rŏch`ĕstər, –ĭstər). 1 City (1990 pop. 70,745), seat of Olmsted co., SE Minn.; inc. 1858. , N.H.--(BUSINESS WIRE)--June 21, 1999-- Cabletron (Cabletron Systems, Inc., Rochester, NH) A networking company founded in 1983 and separated into three companies in 2000: Enterasys Networks (www.enterasys.com) for enterprise class routers and switches, Riverstone Networks (www.riverstonenet. Systems, Inc. (NYSE NYSE See: New York Stock Exchange :CS) today reported financial results for the first quarter of fiscal 2000, ended May 31, 1999. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first quarter were $349.5 million as compared with $345.1 million in the fourth quarter of fiscal 1999 and $365.7 million in the first quarter of fiscal year 1999. On a 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 basis, net income was $7.3 million, or $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. As illustrated in the table below, this compares to pro forma net income of $3.8 million in the prior quarter and a pro forma break even in the same quarter a year ago. The pro forma presentation excludes the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. related to purchase acquisitions of $7.4 million ($5.3 million, net of tax), an inventory 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. related to the discontinuations of several product lines, $15.2 million ($10.0 million, net of tax) and one time 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 $23.7 million ($14.5 million, net of tax). For additional details on the Company's results, see the financial table accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. this release. Including all charges, actual net loss, for the quarter ended May 31, 1999, was $22.5 million or $0.13 per share. This compares to an actual net loss of $12.7 million or $0.07 per share in fiscal Q4, 1999 and $154.6 million or $0.95 per share in fiscal Q1, 1999. "I am very pleased to announce our continued growth in 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. through increased sales and continued cost controls efforts," said Piyush Patel, chairman, 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 reflects the great dedication of my predecessor predecessor - parent , Craig Benson Craig Benson (born New York City, October 8, 1954) came to public attention by founding Cabletron Systems, now known as Enterasys Networks that became one of the largest employers in New Hampshire, and was governor of the state from January 2003 to January 2005. , from the founding of the firm up until his retirement." Patel continued, "Looking forward I will continue to position the company in high growth revenue opportunities such as the emerging service provider market." -0-
Pro Forma
(in thousands, except per share data) (unaudited)
For the three months ended
May 31, February 28, May 31,
1999 1999 1998
Sales $349,533 $345,073 $365,747
Proforma net income 7,282 3,823 0
Proforma net income per
share - basic $ 0.04 $ 0.02 $ 0.00
Proforma net income per
share - diluted $ 0.04 $ 0.02 $ 0.00
Weighted average number of
common shares outstanding
- Basic 172,480 172,161 163,394
Weighted average number of
common shares outstanding
- Diluted 181,671 181,342 163,394
Earnings before interest, taxes,
depreciation and
amortization $ 26,161 $ 23,079 $ 15,567
Note: Pro forma results for the periods ended May 31, 1999, February February: see month. 28, 1999 and May 31, 1998, net of applicable taxes, exclude the amortization of intangible assets related to purchase acquisitions of $7.4 million, $8.4 million and $6.7 million, respectively, an inventory write-off related to product discontinuations of $15.2 million (reflected in May 31, 1999 cost of sales) and a $23.7 million restructuring charge (reflected in special charges), $17.6 million (fixed asset loss) and $150.0 million (reflected in special charges), respectively. The inventory write-off as well as the restructuring charge relate to a previously announced strategic business 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. and 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). . About Cabletron Systems Cabletron Systems, a premier provider of enterprise-class networking solutions, delivers dependable network access and communications to millions of people worldwide. With scaleable products designed for Fortune 1000 enterprise networks, service providers and small businesses, Cabletron provides simple, reliable and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. business solutions for the information age. Cabletron's web site can be reached on 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 at: http://www.cabletron.com. -0-
CABLETRON SYSTEMS, INC.
Consolidated Condensed Statements of Operations
(three months ended May 31, 1999 and 1998)
(in thousands, except per share data)
(unaudited)
First Quarter
2000 1999
---- ----
Net sales $349,533 $365,747
Cost of sales 212,615 216,112
------------ ------------
Gross profit 136,918 149,635
Operating expenses:
R & D 50,797 54,209
S G & A 95,002 100,112
Amortization of acquired intangible
assets 7,360 6,674
Special charges 23,736 150,000
------------ ------------
Operating income (loss) (39,977) (161,360)
Interest income 4,068 3,839
------------ ------------
Income (loss) from operations before
income taxes (35,909) (157,521)
Income tax expense (benefit) (13,384) (2,952)
------------ ------------
Net Income (loss) ($22,525) ($154,569)
============ ============
Earnings (loss) per share - Basic ($0.13) ($0.95)
============ ============
Earnings (loss) per share - Diluted ($0.13) ($0.95)
============ ============
Weighted average number of common
shares outstanding:
Basic 172,480 163,394
============ ============
Diluted 172,480 163,394
============ ============
CABLETRON SYSTEMS, INC.
Consolidated Condensed Balance Sheets
(May 31, 1999 and February 28, 1999)
(in thousands)
Assets
(unaudited)
5/31/99 2/28/99
Cash & short-term investments $227,277 $273,354
Accounts receivable (net) 220,605 216,793
Inventories 216,657 229,512
Deferred income taxes 53,492 60,252
Other assets 59,090 60,510
------------ ------------
Total current assets 777,121 840,421
Investments 237,635 202,984
Property, plant & equipment (net) 172,052 188,479
Intangible assets 188,547 199,419
Deferred income taxes 158,190 135,197
------------ ------------
Total assets $1,533,545 $1,566,500
============ ============
Liabilities & Stockholders' Equity
Accounts payable $120,377 $121,580
Other current liabilities 327,691 347,896
------------ ------------
Total current liabilities 448,068 469,476
Long-term obligations 1,878 ---
Long-term deferred income taxes 10,321 7,191
------------ ------------
Total liabilities 460,267 476,667
Stockholders' equity 1,073,278 1,089,833
------------ ------------
Total liabilities &
stockholders' equity $1,533,545 $1,566,500
============ ============
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