Carrier Access Reports Third-Quarter 2003 Financial Results; Revenues Grow 31% Sequentially; Company Achieves Third Consecutive Quarterly Profit.Business Editors/High-Tech Writers 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)--Oct. 21, 2003 Carrier Access Corporation (Nasdaq: 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 leading provider of broadband access See broadband and wireless broadband. solutions, today reported its financial results for the third quarter ended September September: see month. 30, 2003. Revenues for the third quarter of fiscal 2003 were $15.9 million compared with $12.2 million for the second quarter of fiscal 2003 and $10.5 million for the third quarter of fiscal 2002. Net income for the third quarter of fiscal 2003 was $702,000 or $0.03 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 compared with a net income for the second quarter of fiscal 2003 of $122,000 or $0.00 per diluted share and a net loss of $14.9 million or $0.60 per diluted share for the third quarter of fiscal 2002. Revenues for the first nine months of fiscal 2003 were $39.3 million compared with $38.8 million in the same period last year. Net income for the first nine months of fiscal 2003 was $941,000 or $0.04 per diluted share compared with a net loss for the first nine months of fiscal 2002 of $44.6 million or $1.80 per diluted share. During the first nine months of 2003, the company recovered significant amounts of aged receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , and accordingly changed its estimates for allowance for doubtful accounts Allowance for Doubtful Accounts An estimation made by a company and documented on its balance sheet for receivables that might go uncollected. Notes: It is standard practice for a company to have funds set aside for money that cannot be collected. . "This was a great quarter for Carrier Access, our third consecutive quarter of revenue and net income growth," said Roger Koenig, 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. , Carrier Access Corporation. "We are clearly executing our plan to return to profitability and to increase our revenue through diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of our customer base with the introduction of new products. Our third-quarter results demonstrate our progress as revenues grew 31% sequentially to $15.9 million, reflecting increased market demand for our wireless, integrated business services, Voice over IP (VoIP), and fiber solutions. Our investments in research and development over the last two years are now showing returns as we continue to deliver new applications to new customers. As a result, we believe we are gaining momentum and market share in our target access segments. "The third quarter was particularly significant for us in the wireless market. We believe that our success is due to a continuing wireless carrier focus on cell site efficiency, improving remote management, upgrading sites for E911 compliance, and providing packetized traffic for 3G migration. In June June: see month. of 2002, we introduced the Axxius(TM) 800 platform as part of our market diversification strategy and we are now recognizing the benefits of that investment with 28% of our Q3 revenue generated from sales to the wireless market. We intend to continue our development efforts in this area to enable wireless carrier customers to migrate to new packet-based solutions for even greater operational efficiencies. "In addition to gaining momentum in the wireless market, earlier this month we announced successful trials and a strategic partnership for fiber-to-the-premises (FTTP (Fiber To The Premises) The installation of optical fiber from the carrier directly into the home or office. Also called "fiber to the home" (FTTH). See PON and FTTC. See also FTP. ) deployments. Our product development of the Exxtenz(TM) Business Optical Network Terminal (B-ONT) began to pay off as well as in the third quarter as we recognized our first meaningful revenue for this new access technology. We are clearly delivering results on our investment in packetized access technologies that are designed to lower the cost of delivering new broadband services See broadband and broadband service provider. to businesses and end users. During the third quarter, we added new features to our Adit adit (ăd`ĭt), in mining, underground passage excavated nearly horizontally, with one end open to the earth's surface, usually used to service a mine. The adit end is the furthermost end from the surface, i.e., the location where miners work. (R) 600 platform, and successfully trialed new VoIP features for international customers. We are seeing increased demand for our Adit 600 platform both for traditional voice deployments and for VoIP applications. We are extremely encouraged by our customers' adoption of the Adit 600 platform. "According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. market analysts, network edge spending overtook o·ver·took v. Past tense of overtake. core spending in 2001 and they predict that during 2004, edge expenditures will outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, the core by 3 to 1. Our plan is to continue our research and development efforts in market-disruptive technologies and take advantage of the shift in spending towards packet-based access solutions. We believe we can take advantage of this shift as our products support both traditional circuit-based telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. and packet-based solutions. We believe we are very well-positioned to deliver the 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. solutions required by service providers at the edge of the network. "In summary, we are very pleased with the results of our third quarter. We believe that we are demonstrating the results of the strategy that we put in place over the last two years." Carrier Access will hold a conference call today at 4:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to review these results. The call is open to the public. Those who wish to participate should dial 415-228-4835, domestically or internationally, at least fifteen 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 P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. , December December: see month. 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 new customer initiatives and the ability to attain revenue with these new customers initiatives, as well as our growth prospects and market share gains in broadband access and service creation. 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, 2002 and other documents periodically filed with the Securities and Exchange Commission. We do not undertake any obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise. About Carrier Access Corporation Carrier Access manufactures broadband access and service delivery platforms for both landline Land based. Refers to standard telephone and data communications systems that use in-ground and telephone pole cables in contrast to wireless cellular and satellite services. and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. carriers. Our solutions enable our customers to expand service revenues, lower operating costs operating costs npl → gastos mpl operacionales , and extend capital budgets. Founded in 1992, Carrier Access has delivered more than 3.0 million voice and data lines for customers in North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and International markets. The company focuses on broadband access from central offices to customer premises, next-generation wireless transport and data infrastructure, and enterprise service delivery. Carrier Access products meet and exceed the highest industry 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. , reliability and quality standards, including Telcordia(TM) OSMINE (Operations Systems Modification of Intelligent Network Elements) A system from Telcordia for verifying compatibility with Telcordia-designed operating systems. , 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, Solve for X, Axxius, Adit, and Exxtenz are trademarks of Carrier Access Corporation. Any other trademark is the trademark of its respective owner.
CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Net revenue $15,927 10,534 $39,286 38,787
Cost of goods sold 9,169 6,342 22,010 25,851
------- ------ ------- -------
Gross profit 6,758 4,192 17,276 12,936
------- ------ ------- -------
Operating expenses:
Research and development 2,525 5,283 7,638 20,069
Sales and marketing 2,763 4,157 8,183 14,186
General and administrative 1,277 1,675 3,842 10,492
Bad debt expense (recoveries) (423) 7 (2,981) 3,060
Asset impairment charges - 8,995 - 8,995
Other intangible amortization - 72 - 216
------- ------ ------- -------
Total operating expenses 6,142 20,189 16,682 57,018
------- ------ ------- -------
Income (loss) from operations 616 (15,997) 594 (44,082)
Other income, net 86 128 258 592
------- ------ ------- -------
Income (loss) before income taxes 702 (15,869) 852 (43,490)
Income tax expense (benefit) - (1,016) (89) 1,142
------- ------ ------- -------
Net income (loss) $702 $(14,853) $941 $(44,632)
======= ====== ======= ========
Income (loss) per share:
Basic $0.03 $(0.60) $0.04 $(1.80)
Diluted $0.03 $(0.60) $0.04 $(1.80)
Weighted average common shares:
Basic
24,807 24,766 24,787 24,753
Diluted
25,952 24,766 25,619 24,753
CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share amounts)
September 30, December 31,
2003 2002
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $14,166 $14,900
Marketable securities available for sale 17,020 10,828
Accounts receivable, net 12,664 8,598
Other receivables 1,107 174
Income tax receivable 83 6,989
Inventory, net 23,694 24,134
Prepaid expenses and other 1,039 1,024
-------- ---------
Total current assets 69,773 66,647
Property and equipment, net of accumulated
depreciation and amortization 7,049 9,462
Other assets 345 328
-------- ---------
Total assets $77,167 $76,437
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,412 $5,437
Accrued expenses and other liabilities 3,587 4,886
-------- ---------
Total current liabilities 9,999 10,323
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000
shares authorized and no shares issued or
outstanding at September 30, 2003 and
December 31, 2002 -- --
Common stock, $0.001 par value, 60,000
shares authorized and 24,834 shares issued
and outstanding at September 30, 2003 and
24,771 shares issued and outstanding at
December 31, 2002 25 25
Additional paid-in capital 85,861 85,785
Deferred compensation (20) (65)
Accumulated deficit (18,702) (19,643)
Accumulated other comprehensive income 4 12
-------- ---------
Total stockholders' equity 67,168 66,114
-------- ---------
Total liabilities and stockholders' equity $77,167 $76,437
======== =========
CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine Months Ended
September 30,
------------------
2003 2002
---- ----
Cash flows from operating activities:
Net income (loss) $941 $(44,632)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization expense 2,951 4,678
Provision for (recoveries of) doubtful accounts,
net (2,981) 3,060
Provision for inventory obsolescence (212) 2,608
Stock-based compensation 70 169
Asset impairment charges - 8,995
Deferred income tax expense - 7,318
Changes in operating assets and liabilities:
Accounts receivable (1,086) 6,307
Notes receivable - (775)
Income taxes receivable 6,906 (4,211)
Inventory 652 9,233
Prepaid expenses and other (970) 784
Accounts payable and accrued expenses (323) (5,201)
-------- ---------
Net cash provided (used) by
operating activities 5,948 (11,667)
-------- ---------
Cash flows from investing activities:
Purchases of property and equipment (532) (1,611)
Purchases of marketable securities, gross (14,208) (8,245)
Sales and maturities of marketable securities 8,007 7,259
-------- ---------
Net cash used by investing
activities (6,733) (2,597)
-------- ---------
Cash flows from financing activities:
Proceeds from exercise of stock options 51 14
-------- ---------
Net decrease in cash and cash equivalents (734) (14,250)
Cash and cash equivalents at beginning of period 14,900 24,741
-------- ---------
Cash and cash equivalents at end of period $14,166 $10,491
======== =========
Supplemental cash flow disclosures:
Cash received for income taxes $6,995 $1,449
======== =========
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