Carrier Access Reports Fourth-Quarter and 2002 Year-End Financial Results.Business Editors BOULDER Boulder, city, United States Boulder, city (1990 pop. 83,312), seat of Boulder co., N central Colo.; inc. 1871. A Rocky Mountain resort and a suburb of Denver, it is the seat of the Univ. of Colorado (1876). , Colo.--(BUSINESS WIRE)--Jan. 21, 2003 Carrier Access Corporation (NASDAQ NASDAQ 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 : CACS CACS Center for Advanced Computer Studies CACS Computer Audit, Control and Security CACS Carrier Access Corporation (stock symbol) CACs Criteria Air Contaminants CACS Center for Alaskan Coastal Studies CACS Coronary Artery Calcium Scoring ), a manufacturer of broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communications equipment, today reported results for its fourth quarter and year ended December December: see month. 31, 2002. Net revenue for the fourth quarter of 2002 was $11.5 million, compared to net revenue of $10.5 million for the third quarter of 2002, an increase of ten percent. Net revenue for the year 2002 decreased to $50.2 million from $100.7 million for the year 2001, due largely to the decline in the company's sales to its historical CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) customers. During the fourth quarter, the company recorded 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 asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges of $2.8 million. Net loss, excluding restructuring and asset impairment charges, reported for the fourth quarter 2002 was $.21 per share, or $5.2 million. Net loss, including restructuring and asset impairment charges, for the fourth quarter of 2002 was $0.32 per share, or $8 million, as compared to a third quarter 2002 net loss of $0.60 per share, or $14.9 million. Net loss for the year 2002 was $2.13 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, or $52.7 million, compared to the net loss for the year 2001 of $.60 per diluted share or $14.9 million. Cash and cash equivalents, together with securities available for sale, were $25.7 million at the end of the fourth quarter of 2002, a quarter-over-quarter increase of $2.4 million, or ten percent. Year-over-year the company's cash decreased by $10.9 million. The company continues to maintain a strong balance sheet with no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . In addition, Carrier Access anticipates receiving income tax refunds Tax refund Money back from the government when too much tax has been paid or withheld from a salary. in 2003 totaling approximately $7 million, which will further increase its cash position. The company announced that it has decreased its expenses and anticipates operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the first quarter of 2003 to be $7.6 million, a decrease of approximately 40 percent. During the fourth quarter, Carrier Access announced that it would take between a $2 to $4 million charge for restructuring related to facility closures, position elimination and disposition of assets. The Company took a $2.8 million charge for this restructuring, $800,000 of which was non-cash and $1.4 million of which was facility related. Of the cash portion of the restructuring charge 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. , approximately $400,000 was disbursed in the fourth quarter of 2002. The remaining cash portion of the restructuring charges is anticipated to be disbursed throughout 2003 and 2004. "In 2002, several of our service provider customers filed for bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most to restructure their businesses," said Roger Koenig, 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. of Carrier Access. "The rapid loss of CLEC customers required Carrier Access to substantially change its business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets in 2002. Throughout the year, we aggressively developed new customers, applications, and products for three key markets: integrated business services, wireless infrastructure, and fiber business access. These investments, combined with the reduced revenue, produced higher expenses and operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. while we restructured. We believe that the results of these investments will enable us to return to profitability and re-establish re-establish Verb to create or set up (an organization, link, etc.) again re-establishment n sustained growth in both revenue and earnings." "Highlights of our success in 2002 were the establishment of new wireless customers with new products, first shipments of hosted IP voice solutions, and major new supply agreements," continued Koenig. "Over the last two years, Carrier Access has successfully transitioned to a customer base of the strongest carriers and channel partners, something very few companies have been able to do. We believe that this transition will produce steady, 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. growth for Carrier Access, its employees, and investors." Carrier Access will hold a conference call today at 4:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. to review these results. The call is open to the public. Those who wish to participate should dial 415-228-4835 at least 15 minutes prior to the scheduled start time for the call and reference Carrier Access. Carrier Access has also scheduled this event to be broadcast live via web cast and replayed until 5:00 p.m. EST, February 7, 2003. To access this web cast please go to the Investor Relations Investor relations The process by which the corporation communicates with its investors. page at www.carrieraccess.com/investors, or www.companyboardroom.com. Forward-Looking Statement 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. Caution This press release contains forward-looking statements regarding our plan to restructure and associated cost reduction measures, expense levels and revenue projections, new procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. agreements and the ability to attain revenue under these agreements, our products, market conditions, our financial position and our growth prospects and market share gains in broadband access See broadband and wireless broadband. and service creation particularly in the RBOC (Regional Bell Operating Company) The Bell telephone companies that were spun off of AT&T by court order in 1984 (the Divestiture). Also known as the "Baby Bells," the initial seven RBOCs were Nynex, Bell Atlantic, BellSouth, Southwestern Bell, US West, , business enterprise and wireless markets. We caution that actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, continuing uncertainty regarding general economic conditions, changes in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. by carriers and telecommunications companies See telecom company. , market acceptance of our products, problems with or at our customers, distributors and/or suppliers, growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. within our industry, the financial stability of our customers, the introduction of new competition and technologies, and other risks and uncertainties including those factors discussed in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2001 and other documents periodically filed with the Securities and Exchange Commission. We disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation or intention to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise. About Carrier Access Corporation Founded in 1992, Carrier Access manufactures broadband communications equipment that enables telecommunications companies to accelerate service revenue, lower operating costs operating costs npl → gastos mpl operacionales , and extend capital budgets. The company focuses on three segments of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. : wireless infrastructure, enterprise service delivery, and fiber access. Its products have delivered more than 2.5 million voice and data lines for customers and meet the industry's highest reliability and broadband interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. standards, including Telcordia(TM) TIRKS/OSMINE, NEBS NEBS Network Equipment Building System (Bell Telephone Labs) NEBS Network Equipment Building Standards NEBS New England Business Services NEBS New England Barbecue Society NEBS Neue Europäische Bewegung Schweiz Level 3 and ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001. For more information visit www.carrieraccess.com. Carrier Access, the Carrier Access logo and tagline, and Solve for X are trademarks of Carrier Access Corporation. Any other trademark is the trademark of its respective owner.
CARRIER ACCESS CORPORATION
CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
---- ---- ---- ----
Net revenue $11,461 $21,535 $50,247 $100,706
Cost of goods sold 7,294 12,336 33,145 54,090
-------- -------- ------- ---------
Gross profit 4,167 9,199 17,102 46,616
-------- -------- ------- ---------
Operating expenses:
Research and development 3,629 7,499 23,536 33,205
Sales and marketing 4,074 5,338 18,254 23,299
General and administrative 1,838 2,118 15,388 9,034
Restructuring charge 1,981 -- 1,981 --
Asset impairment charge relating
to restructuring 800 -- 800 --
Asset impairment charge relating
to goodwill -- -- 8,995 4,220
Goodwill and other intangible
amortization -- 647 216 3,460
Amortization of deferred stock
compensation 30 38 199 449
-------- -------- ------- ---------
Total operating expenses 12,352 15,640 69,369 73,667
-------- -------- ------- ---------
Loss from operations (8,185) (6,441) (52,267) (27,051)
Other income, net 121 229 714 1,635
-------- -------- ------- ---------
Loss before income taxes (8,064) (6,212) (51,553) (25,416)
Income tax expense (benefit) (41) (2,481) 1,102 (10,561)
-------- -------- ------- ---------
Net loss $(8,023) $(3,731)$(52,655)$(14,855)
======== ======== ======== ========
Loss per share:
Basic $(0.32) $(0.15) $(2.13) $(0.60)
Diluted $(0.32) $(0.15) $(2.13) $(0.60)
Weighted average common shares:
Basic 24,771 24,740 24,754 24,695
Diluted 24,771 24,740 24,754 24,695
CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December December
31, 31,
ASSETS 2002 2001
--------- ---------
Current assets:
Cash and cash equivalents $14,900 $24,741
Securities available for sale 10,828 11,873
Accounts receivable, net 8,598 17,808
Income tax receivable 6,989 8,468
Inventory, net 24,134 36,500
Deferred income taxes 865 3,958
Prepaid expenses and other 1,198 2,673
--------- ---------
Total current assets 67,512 106,021
Property and equipment, net of accumulated
depreciation and amortization 9,462 14,140
Goodwill other intangibles, net of amortization 146 9,354
Deferred income taxes 928 3,361
Other assets 182 141
--------- ---------
Total assets $78,230 $133,017
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,437 $8,864
Accrued restructuring 1,586 --
Accrued expenses and other liabilities 3,300 5,560
--------- ---------
Total current liabilities 10,323 14,424
Non-current liabilities
Deferred income taxes 1,793 --
Total liabilities $12,116 $14,424
Stockholders' equity:
Preferred stock $0.001 par value, 5,000 shares
authorized and no shares issued or outstanding
at December 31, 2002 and December 31, 2001 -- --
Common stock $0.001 par value, 60,000 shares
authorized and 24,771 shares issued and
outstanding at December 31, 2002 and 24,740
shares issued and outstanding at December 31,
2001 30 30
Additional paid-in capital 85,780 85,968
Deferred compensation (65) (466)
Retained earnings (deficit) (19,643) 33,012
Accumulated other comprehensive income 12 49
--------- ---------
Total stockholders' equity 66,114 118,593
--------- ---------
Commitments and contingencies
Total liabilities and stockholders' equity $78,230 $133,017
========= =========
CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Year Ended
Ended Dec. 31, Dec. 31,
2002 2001 2002 2001
---- ---- ---- ----
Cash flows from operating
activities:
Net loss $(8,023)$(3,731)$(52,655)$(14,855)
Adjustments to reconcile net loss
to net cash provided (used) by
operating activities:
Depreciation and amortization
expense (342) 1,956 2,310 8,117
Provision (credit) for doubtful
accounts and returns, net of
write-offs (1,489) (1,530) 1,570 (434)
Provision (credit) for inventory
obsolescence 441 (200) 3,049 2,547
Compensation expense related to
stock options issued at less than
fair value 30 39 199 736
Asset impairment charge -
goodwill -- -- 8,995 4,220
Deferred income tax benefit -- 4,064 7,318 (2,008)
Changes in operating assets and
liabilities:
Accounts receivable 2,108 (451) 8,416 6,482
Notes receivable -- -- (775) --
Income taxes receivable 5,690 (6,486) 1,479 (4,085)
Inventory 84 2,541 9,317 (8,336)
Prepaid expenses and other 634 (739) 1,418 4,643
Accounts payable and accrued
expenses 1,099 5,668 (4,101) (7,778)
Income taxes payable -- -- -- --
------- ------- ------- --------
Net cash provided (used) by
operating activities 232 1,131 (13,460) (10,751)
------- ------- ------- --------
Cash flows from investing
activities:
Purchases of property and equipment 2,183 (396) 2,597 (5,010)
Purchases and sales of marketable
securities, net 1,994 2,448 1,008 7,634
------- ------- ------- --------
Net cash used by investing
activities 4,177 2,052 3,605 2,624
------- ------- ------- --------
Cash flows from financing
activities:
Proceeds from exercise of stock
options -- 289 14 56
------- ------- ------- --------
Net increase (decrease) in cash and
cash equivalents 4,409 3,472 (9,841) (8,071)
Cash and cash equivalents at
beginning of period 10,491 21,269 24,741 32,812
------- ------- ------- --------
Cash and cash equivalents at end of
period $14,900 $24,741 $14,900 $24,741
======= ======= ======= ========
Supplemental cash flow disclosures:
Cash received for income taxes 5,731 -- 7,180 4,578
Accounts receivable in exchange for
notes receivable -- -- 775 --
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