Cisco Systems Reports Fiscal Year 2001 and Fourth Quarter Earnings.Business Editors and High Tech Writers SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Aug. 7, 2001 Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , Inc., the worldwide leader in networking for the Internet, today reported its fiscal year 2001 and fourth quarter results for the period ending July 28, 2001. 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 fiscal 2001 were $22.29 billion, compared with $18.93 billion for fiscal 2000, an increase of 18%. 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 net income, which excludes the effects of acquisition charges, payroll tax Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. on stock option exercises, 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). costs and other special charges, excess inventory charge (benefit), and net gains realized on minority investments, was $3.09 billion or $0.41 per share for fiscal 2001, compared with pro forma net income of $3.91 billion or $0.53 per share for fiscal 2000, decreases of 21% and 23%, respectively. Actual net loss for fiscal 2001 was $1.01 billion or $0.14 per share, compared with actual net income of $2.67 billion or $0.36 per share for fiscal 2000. Net sales for the fourth quarter of fiscal 2001 were $4.30 billion, compared with $5.72 billion for the same period last year, a decrease of 25%. Pro forma net income was $163 million or $0.02 per share for the fourth quarter of fiscal 2001, compared with pro forma net income of $1.20 billion or $0.16 per share for the fourth quarter of fiscal 2000, decreases of 86% and 87%, respectively. Actual net income for the fourth quarter of fiscal 2001 was $7 million or $0.00 per share, compared with actual net income of $796 million or $0.11 per share for the same period last year. "In many ways, fiscal 2001 was like two different years, starting out even more positive than we anticipated through December with year-over-year growth in the 60%+ range and then turning into an extremely challenging second half of the year," said John Chambers John Chambers could be any of the following people:
v. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. on a few strategic partners as the market recovers." Cisco continues to deliver best-of-breed products across an end-to-end architecture in each of its key markets to meet its customers' business requirements. Addressing the needs of the service provider market, Cisco continued to advance its leadership and expertise in carrier IP systems, voice-over-IP (VoIP), and metropolitan (metro) optical network solutions. With new products for the next-generation Internet router (1) A router in the Internet that forwards IP packets between local, regional and national providers. Same as "IP router." (2) (InterNet Router) Macintosh software from Apple that internetworks different access methods (LocalTalk, EtherTalk, TokenTalk, etc. , IP+Optical, metro, and voice-over-IP markets, Cisco continues to help enable service providers to reduce and optimize optimize - optimisation operational and capital expenses, and build data services that drive new revenue opportunities. In June, Cisco broadened its portfolio of next-generation Internet routers with new capabilities and platforms including the Cisco 7400 Internet Router, the Cisco 12406 Internet Router, the Cisco 10005 Internet Router, and enhancements for the Cisco 7600 Internet Router. Cisco also won a comparative benchmark test by independent testing firm Meircom, demonstrating that the Cisco 12000 Internet Router delivers the lowest latency (1) The time between initiating a request in the computer and receiving the answer. Data latency may refer to the time between a query and the results arriving at the screen or the time between initiating a transaction that modifies one or more databases and its completion. and highest levels of quality of service--a requirement for delay- sensitive applications such as voice and video. Underscoring those results, major service provider customers including Qwest, AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. , France Telecom, Global Crossing, Velocita, China Unicom China Unicom, full name China United Telecommunications Corporation, 中国联通, HKSE: 0762 NYSE: CHU, is a telecommunication operator in the People's Republic of China. 52. , and China Telecom, announced they have selected the Cisco 12000 Internet Router as the platform for delivering superior 10 gigabits per second and VoIP networking. Extending its voice offerings, Cisco introduced Any Service, Any Port (ASAP (chat) asap - As soon as possible. ) on the Cisco 5800 Voice Gateway. Building on its commitment to deliver 10-Gbps OC-192 capabilities across the Cisco IP+optical product portfolio, Cisco introduced OC-192 support on the Cisco ONS ONS Office for National Statistics (UK) ONS One Night Stand ONS Onslaught (Unreal Tournament 2004) ONS Oncology Nursing Society ONS Object Naming Service ONS Offshore Northern Seas 15454 metro optical platform. In addition, the company announced its intent to acquire AuroraNetics, a developer of 10-Gbps silicon technology for metropolitan fiber networks. In the enterprise market, Cisco is committed to delivering innovative technology solutions that help businesses gain competitive advantage and reduce costs. Cisco is seeing widespread acceptance of Cisco AVVID AVVID Architecture for Voice, Video and Integrated Data (Cisco) AVVID Architecture for Voice Video and Integrated Data (Architecture for Voice, Video and Integrated Data) as organizations realize the benefits of deploying solutions based on a consistent architecture for their e-business needs. Cisco AVVID is the architecture that provides the full convergence of data, voice and video. Based on Cisco AVVID, Cisco enterprise technologies such as IP telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. , security/virtual private networking (VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. ), storage networking, optical, routing and switching offer customers the most comprehensive networking solution available today. Cisco introduced nine additions and enhancements to its IP telephony solution consisting of software and hardware for IP telephones, infrastructure, unified messaging Having access to e-mail, voice mail and faxes via a common computer application or by telephone. For example, unified messaging may send faxes and digitized voice mail to a mail server that turns them into e-mail attachments. , and IP contact centers. Some new customers deploying these solutions include Datek Online, United States Marine Corps United States Marine Corps (USMC) Separate military service within the U.S. Department of the Navy (see U.S. Navy), charged with providing marine troops for seizure and defense of advanced bases and with conducting operations on land and in the air in connection with . Reserves, and University of Houston. In the security market, Cisco announced several enhancements to SAFE, its security blueprint blueprint, white-on-blue photographic print, commonly of a working drawing used during building or manufacturing. The plan is first drawn to scale on a special paper or tracing cloth through which light can penetrate. for e-business, as well as new routers with security and VPN functionality. Building on its innovation in the burgeoning storage market, Cisco continues to contribute to the emerging small computer systems interface over IP (iSCSI) standard as this moves towards ratification The confirmation or adoption of an act that has already been performed. A principal can, for example, ratify something that has been done on his or her behalf by another individual who assumed the authority to act in the capacity of an agent. . In addition, Cisco began shipments of the Cisco SN 5420 Storage Router See data mover. , the world's first commercially available iSCSI storage networking platform. In high-end switching, Cisco announced additional enhancements to the Catalyst(R) 6000 Family, including the new 13-slot Catalyst 6513. The company also announced its intent to acquire Allegro (operating system) Allegro - The code name for the major Mac OS release due in mid-1998. http://devworld.apple.com/mkt/informed/appledirections/mar97/roadmap.html. Systems and it announced the industry's highest performing, compact routing solution for intelligent IP services, the Cisco 7400, and enhancements to the Cisco 7600 Internet Router. In the commercial space, Cisco continued its commitment to helping small and medium-sized businesses (SMBs) and key vertical markets maximize their productivity and profitability by using networking solutions including wireless, access products, switches and integrated communication systems. Cisco announced the first comprehensive solution for the multi-unit (MxU) market which includes Cisco Long-Reach Ethernet, Cisco Building Broadband Service See broadband and broadband service provider. Manager, and the Cisco Aironet(R) Series of wireless local area network (WLAN See wireless LAN. WLAN - wireless local area network ) products, to enable the deployment of high-speed broadband connectivity services to MxU buildings including hotels, apartments, and office buildings. Starwood Hotels and Resorts Worldwide, Inc. has begun deploying the Cisco MxU solution. Furthering its Cisco Internet Mobile Office program, Cisco announced that it is working with GRIC GRIC Global Reach Internet Connection GRIC Government Relations Institute of Canada (industry association) and NCR (NCR Corporation, Dayton, OH, www.ncr.com) A technology company specializing in financial terminal transactions, retail systems and data warehousing. Until the late 1990s, NCR was heavily invested in the hardware side of the industry, known worldwide as a major manufacturer of computers to provide business customers with an expanded service footprint area and enable service providers to provide business travelers with access to the most extensive broadband network available worldwide. Cisco announced the new award-winning Cisco 1751 Modular Access Router See edge router and remote access router. to enable SMBs and small branch offices to quickly and cost-effectively reap the benefits of Internet business applications. Cisco also introduced the Cisco 806 Broadband Gateway Router router Portable electric power tool used in carpentry and furniture making that consists of an electric motor, a base, two handle knobs, and bits (cutting tools). A router can cut fancy edges for shelving, grooves for storm windows and weather stripping, circles and ovals and the Cisco 1710 Security Access Router, further extending the Cisco security and VPN portfolio to support small to medium networks, branch offices, and corporate teleworkers. On the global front, Cisco announced that inter-touch, a supplier of broadband network services to the hospitality industry, will connect hotels across Asia Pacific, the Middle East, and Europe under the Cisco Internet Mobile Office initiative. "We believe that productivity is the promise of the Internet and we are just beginning to see the paybacks of Internet applications and networking technology," continued Chambers. "We are in the very early stages of a major technological revolution and the long-term outlook for this industry and the role that Cisco plays in it has not dramatically changed." Cisco will discuss its year-end and fourth quarter results for fiscal 2001 on a conference call today, beginning at 1:45 p.m. PST PST Paroxysmal supraventricular tachycardia, see there . A Webcast of the conference call will be available to all interested parties on the Cisco Web site at www.cisco.com under the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section. About Cisco Systems Cisco Systems, Inc., (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 : CSCO CSCO Cisco Systems Incorporated (stock symbol) CSCO Chief Supply Chain Officer ) is the worldwide leader in networking for the Internet. News and information are available at www.cisco.com. This release contains projections and other 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. regarding future events and the future financial performance of Cisco that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by Cisco with the SEC, specifically the most recent reports 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. , 8-K, and 10-Q, each as it may be amended from time to time, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including risks associated with business and economic conditions and growth in the networking industry in various geographic regions; global economic conditions; overall information technology spending, especially service provider 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. in the data or IP segments; variations in customer demand for products and services; the ability to successfully restructure existing businesses; the timing of orders and manufacturing lead times; changes in customer order patterns; insufficient, excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. ; variations in sales channels, product costs, or mix of products sold; the ability to successfully reduce overhead and manage expenses; the ability to successfully integrate and operate acquired businesses and technologies; increased competition in the networking industry; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; the trend towards sales of integrated network A network that supports both data and voice and/or different networking protocols. See converged network and new public network. solutions; manufacturing and sourcing risks; Internet infrastructure and regulation; international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , the timing and amount of employer payroll tax to be paid on employees' gains on stock options exercised; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. involving patents, intellectual property, antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. and other matters; stock price volatility; financial risk management; and potential volatility in operating results, among others. The financial information contained in this release should be read in conjunction with the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in Cisco's most recent reports on Form 10-K and Form 10-Q Form 10-Q See 10-Q. , each as it may be amended from time to time. Cisco's results of operations for the three and twelve months ended July 28, 2001 are not necessarily indicative of Cisco's operating results for future periods. Aironet, Catalyst, Cisco, Cisco AVVID, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. or its affiliates in the U.S. and certain other countries. All other brands, names, or trademarks mentioned in this document or Web site are the property of their respective owners. Copyright(c)2001 Cisco Systems, Inc. All rights reserved.
Cisco Systems, Inc.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(See pro forma adjustments listed in table below)
(In millions, except per-share amounts)
Three Months Ended Fiscal Year Ended
------------------- ------------------
July 28, July 29, July 28, July 29,
2001 2000 2001 2000
-------- ------- -------- --------
(Unaudited)(Unaudited) (Unaudited) (Unaudited)
NET SALES $ 4,298 $ 5,720 $22,293 $18,928
Cost of sales 2,049 2,058 9,159 6,746
-------- -------- ------- --------
GROSS MARGIN 2,249 3,662 13,134 12,182
Operating expenses:
Research and development 893 825 3,778 2,685
Sales and marketing 1,138 1,142 5,240 3,917
General and administrative 190 180 768 568
-------- -------- ------- --------
Total operating expenses 2,221 2,147 9,786 7,170
-------- -------- ------- --------
OPERATING INCOME 28 1,515 3,348 5,012
Interest and other
income, net 199 197 940 577
-------- -------- ------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES 227 1,712 4,288 5,589
Provision for income taxes 64 514 1,202 1,675
-------- -------- ------- --------
NET INCOME $ 163 $ 1,198 $ 3,086 $ 3,914
======== ======== ======== ========
Net income per
share--basic $ 0.02 $ 0.17 $ 0.43 $ 0.57
========= ======== ======== ========
Net income per
share--diluted $ 0.02 $ 0.16 $ 0.41 $ 0.53
========= ======== ======== ========
Shares used in per-share
calculation--basic 7,294 7,042 7,196 6,917
========= ======== ======== ========
Shares used in per-share
calculation--diluted 7,484 7,556 7,544 7,438
========= ======== ======== ========
The above pro forma amounts
have been adjusted to exclude
the following items:
In-process research
and development $ -- $ 461 $ 855 $ 1,373
Payroll tax on stock
option exercises 5 26 55 51
Acquisition-related costs -- 37 -- 62
Amortization of
goodwill and other
acquisition-related
charges 347 169 1,210 291
Net gains realized
on minority investments -- (344) (190) (531)
Restructuring costs
and other special
charges -- -- 1,170 --
Excess inventory charge
(benefit) (187) -- 2,062 --
Income tax effect (9) 53 (1,062) --
------- ------- ------- -------
$ 156 $ 402 $ 4,100 $ 1,246
======= ======= ======= =======
Cisco Systems, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
Three Months Ended Fiscal Year Ended
------------------- -------------------
July 28, July 29, July 28, July 29,
2001 2000 2001 2000
------ ------ ------ ------
(Unaudited) (Unaudited)
NET SALES $ 4,298 $ 5,720 $22,293 $18,928
Cost of sales 1,862 2,058 11,221 6,746
------- ------- ------- -------
GROSS MARGIN 2,436 3,662 11,072 12,182
Operating expenses:
Research and development 893 825 3,778 2,685
Sales and marketing 1,138 1,142 5,240 3,917
General and administrative 190 217 768 630
Restructuring costs and
other special charges -- -- 1,170 --
Payroll tax on stock
option exercises 5 26 55 51
Amortization of goodwill and
other acquisition-related
charges 347 169 1,210 291
In-process research
and development -- 461 855 1,373
------ ------ ------ ------
Total operating expenses 2,573 2,840 13,076 8,947
------ ------ ------ ------
OPERATING INCOME (LOSS) (137) 822 (2,004) 3,235
Net gains realized on
minority investments - 344 190 531
Interest and other income,
net 199 197 940 577
-------- ------- ------- -------
INCOME (LOSS) BEFORE
PROVISION FOR INCOME
TAXES 62 1,363 (874) 4,343
Provision for income taxes 55 567 140 1,675
-------- -------- ------- -------
NET INCOME (LOSS) $ 7 $ 796 $ (1,014) $ 2,668
======== ======= ======== =======
Net income (loss)
per share--basic $ 0.00 $ 0.11 $ (0.14) $ 0.39
======== ======== ======== =======
Net income (loss) per
share--diluted (1) $ 0.00 $ 0.11 $ (0.14) $ 0.36
======== ======== ======== =======
Shares used in per-share
calculation--basic 7,294 7,042 7,196 6,917
======== ======== ======== =======
Shares used in per-share
calculation--diluted (1) 7,484 7,556 7,196 7,438
======== ======== ======== =======
Note 1: Net loss per share--diluted for the fiscal year ended July
28, 2001 is computed using the weighted-average number of common
shares outstanding during the period and excludes common-equivalent
shares as they are anti-dilutive.
Cisco Systems, Inc.
CONSOLIDATED BALANCE SHEETS
(In millions)
July 28, July 29,
2001 2000
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $4,873 $4,234
Short-term investments 2,034 1,291
Accounts receivable, net of
allowance for doubtful accounts
of $288 at fiscal 2001 and $43
at fiscal 2000 1,466 2,299
Inventories, net 1,684 1,232
Deferred tax assets 1,809 1,091
Lease receivables 405 588
Prepaid expenses and other current assets 564 375
--------- ---------
Total current assets 12,835 11,110
Investments 10,346 13,688
Restricted investments 1,264 1,286
Property and equipment, net 2,591 1,426
Goodwill and purchased intangible
assets, net 4,659 4,087
Lease receivables 253 527
Other assets 3,290 746
------ ------
TOTAL ASSETS $ 35,238 $ 32,870
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 644 $ 739
Income taxes payable 241 233
Accrued compensation 1,058 1,317
Deferred revenue 3,214 1,386
Other accrued liabilities 2,553 1,521
Restructuring liabilities 386 --
------ ------
Total current liabilities 8,096 5,196
Deferred tax liabilities - 1,132
Minority interest 22 45
Shareholders' equity 27,120 26,497
------ -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 35,238 $ 32,870
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