Cisco Systems Reports Fourth Quarter Earnings.Business Editors 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)--August 8, 2000 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 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 results for the period ending July July: see month. 29, 2000. 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 fourth quarter of fiscal 2000 were $5.72 billion, compared with $3.56 billion for the same period last year, an increase of 61%. 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, and net gains realized on minority investments, was $1.20 billion or $0.16 per share for the fourth quarter of fiscal 2000, compared with pro forma net income of $710 million or $0.10 per share for the fourth quarter of fiscal 1999, increases of 69% and 60%, respectively. During the fourth quarter of fiscal 2000, Cisco completed the acquisitions of Atlantech Technologies, Ltd., JetCell, Inc., PentaCom Ltd., Qeyton Systems, and Seagull seagull a noisy, gregarious bird that frequents the seashore. Web-footed, hook-billed, white with gray wings. Member of the family Laridae and of the genus Larus. Semiconductor, Ltd. for a combined purchase price, including assumed liabilities, of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.39 billion and took one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges of $461 million, or approximately $0.06 per share on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , as write-offs of purchased in-process R&D. Additionally, Cisco completed the acquisitions of ArrowPoint Communications, Inc., InfoGear InfoGear Technology Corporation, founded in 1995, was a startup technology and services company focused on the market for Internet appliances. InfoGear had offices in California and R&D center in Israel. Technology Corp., and SightPath, Inc. which were accounted for as poolings of interests. Actual net income for the fourth quarter of fiscal 2000 was $796 million or $0.11 per share, compared with $605 million or $0.08 per share for the same period last year. Net sales for fiscal 2000 were $18.93 billion, compared with $12.17 billion for fiscal 1999, an increase of 55%. Pro forma net income was $3.91 billion or $0.53 per share for fiscal 2000, compared with pro forma net income of $2.52 billion or $0.36 per share for fiscal 1999, increases of 56% and 47%, respectively. Actual net income for fiscal 2000 was $2.67 billion or $0.36 per share, compared with $2.02 billion or $0.29 per share for fiscal 1999. The net income per share and number of shares used in the per-share calculation for all periods presented reflect the two-for-one stock split that was effective March 22, 2000. "We predicted five years ago that we were 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 second Industrial Revolution that would determine the prosperity of companies, countries, and individuals. Today, the Internet continues to drive the strongest U.S. economy in history," said John Chambers John Chambers could be any of the following people:
In the service provider marketplace, Cisco continued to advance its strategy for New World integrated data, voice, and video networks and made progress in each of its key areas including optical networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. , wireless solutions, and voice-transition technology. In the optical market, Cisco expanded its portfolio of Internet-scale, carrier-class solutions by announcing the acquisition of Qeyton Systems, a developer of metropolitan dense wave division multiplexing (spelling) wave division multiplexing - A common misnomer for wavelength division multiplexing. (MDWDM MDWDM Metropolitan Dense Wave Division Multiplexing (Cisco) ) technology. Increasing its 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). offering, Cisco announced its intent to acquire IPmobile to help service providers build the next-generation IP-based wireless infrastructure known as "3G" to create a broad array of new and innovative wireless data and voice services. Underscoring Cisco's strategy to provide service providers with a smooth transition path to New World networks, Cisco announced its intent to acquire Komodo Technology, Inc. and HyNEX, Ltd. Komodo's voice-over-IP (VoIP) devices allow analog telephones to place calls over IP-based networks. HyNEX's products strengthen Cisco's solution in international markets by accelerating the deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of IP+ATM networks to enable service providers to deliver an expanded range of data, voice, and video services. In the enterprise market, Cisco strengthened its storage area networking strategy by entering into a technology agreement with Brocade brocade (brōkād`), fabric, originally silk, generally reputed to have been developed to a high state of perfection in the 16th and 17th cent. in France, Italy, and Spain. Communication Systems and announcing its intent to acquire NuSpeed Internet Systems. Both transactions will enable companies to store, retrieve To call up data that has been stored in a computer system. When a user queries a database, the data are retrieved into the computer first and then transmitted to the screen. (language) Retrieve , and back-up In cartography, an image printed on the reverse side of a map sheet already printed on one side. Also the printing of such images. data more efficiently by seamlessly interconnecting storage area networks over a single IP-based infrastructure. Cisco also introduced a range of gigabit and 10-gigabit solutions for its Catalyst catalyst, substance that can cause a change in the rate of a chemical reaction without itself being consumed in the reaction; the changing of the reaction rate by use of a catalyst is called catalysis. (R) 6000, 4000, and 2900 series XL switching families to deliver gigabit bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz and intelligent network services across traditional enterprises and service provider environments. Cisco also expanded its portfolio of content networking solutions by announcing its intent to acquire Netiverse, Inc., a leading provider of content acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. technology that enhances the performance and functionality of networking devices. In the small and medium-sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized business market, Cisco joined with GE Industrial Systems to form a new company, GE Cisco Industrial Networks, to help small and medium-sized businesses increase factory-to-office communications through Internet-based solutions. GE Cisco Industrial Networks will assess, design, and build network infrastructures for manufacturing plant floor and industrial environments that will enable company-wide Internet-based communication. "We see no indications in the marketplace that the radical Internet business transformation in practices like customer service, supply-chain management, employee training, empowerment em·pow·er tr.v. em·pow·ered, em·pow·er·ing, em·pow·ers 1. To invest with power, especially legal power or official authority. See Synonyms at authorize. 2. , and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. that is taking place around the world today is slowing -- in fact, we believe it is accelerating globally. We would like to thank our shareholders, customers, employees, partners, and suppliers for their continued commitment and confidence in our ability to execute in the future as we have in the past," concluded Chambers. 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 may contain projections or 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 or the future financial performance of the Company 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, including amendments 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. , which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including risks associated with acquisition strategy, dependence on new product offerings, competition, patents, intellectual property and licensing, future growth, rapid technological and market change, 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. , volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of stock price, financial risk management, and potential volatility in operating results, among others. Catalyst, Cisco, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. Copyright(c)2000 Cisco Systems, Inc. All rights reserved.
Cisco Systems, Inc.
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PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding IPR&D, Payroll Tax on Stock Option Exercises,
Acquisition-Related Costs, Amortization of Goodwill and Intangible
Assets, and Net Gains Realized on Minority Investments
----------------------------------------------------------------------
(In millions, except per-share amounts)
Quarters Ended Fiscal Years Ended
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
(Unaudited)(Unaudited)
------- ------- --------- --------
Net sales $ 5,720 $ 3,558 $18,928 $12,173
Cost of sales 2,058 1,261 6,746 4,259
------- ------- -------- --------
Gross margin 3,662 2,297 12,182 7,914
Operating expenses:
Research and
development 825 509 2,685 1,663
Sales and marketing 1,142 709 3,917 2,465
General and
administrative 180 110 568 365
------- ------- --------- --------
Total operating
expenses 2,147 1,328 7,170 4,493
------- ------- --------- --------
Operating income 1,515 969 5,012 3,421
Interest and other
income, net 197 93 577 330
------- ------- --------- --------
Income before
provision
for income taxes 1,712 1,062 5,589 3,751
Provision for
income taxes 514 352 1,675 1,234
------- ------- --------- --------
Net income $ 1,198 $ 710 $ 3,914 $ 2,517
======= ======= ========= ========
Net income per
share--basic $ .17 $ .10 $ .57 $ .38
======= ======= ========= ========
Net income per
share--diluted $ .16 $ .10 $ .53 $ .36
======= ======= ========= ========
Shares used in
per-share
calculation--basic 7,042 6,765 6,917 6,646
======= ======= ========= ========
Shares used in
per-share
calculation--diluted 7,556 7,201 7,438 7,062
======= ======= ========= ========
PRO FORMA ONLY The above pro forma amounts for the quarter ended July 29, 2000 have been adjusted to eliminate the $461 million 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. of purchased in-process R&D, $26 million of payroll tax on stock option exercises, $37 million of acquisition related costs, $169 million of amortization of goodwill and purchased 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. , and $344 million of net gains realized on minority investments, net of related tax of $53 million. The above pro forma amounts for fiscal 2000 have been adjusted to eliminate the $1.37 billion write-off of purchased in-process R&D, $51 million of payroll tax on stock option exercises, $62 million of acquisition-related costs, $291 million of amortization of goodwill and purchased intangible assets, and $531 million of net gains realized on minority investments, net of related tax of $0 million. The above pro forma amounts for the quarter and year ended July 31, 1999 have been adjusted to eliminate the $81 and $471 million write-off of purchased in-process R&D, $16 and $16 million of acquisition-related costs, $19 and $61 million of amortization of goodwill and purchased intangible assets, net of related tax benefits of $11 and $54 million, respectively. All historical financial information has been restated to reflect the acquisitions of StratumOne Communications, Inc. and TransMedia Communications, Inc. in the first quarter of fiscal 2000, and Cerent An optical equipment maker that was sold to Cisco Systems for $6.9 billion in August of 1999. [1] Corporation and WebLine Communications Corporation in the second quarter of fiscal 2000, and ArrowPoint Communications, Inc., InfoGear Technology, Corp., and SightPath, Inc. in the fourth quarter of fiscal 2000 which were accounted for as poolings of interests. In addition, the historical financial information has been restated to reflect the acquisition of Fibex Systems which was completed in the fourth quarter of fiscal 1999 and accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. . The net income per share and number of shares used in the per-share calculation for all periods presented reflect the two-for-one stock split effective March 22, 2000.
Cisco Systems, Inc.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
(In millions, except per-share amounts)
Quarters Ended Fiscal Years Ended
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
(Unaudited)(Unaudited)
------- ------- ------- -------
Net sales $ 5,720 $ 3,558 $18,928 $12,173
Cost of sales 2,058 1,261 6,746 4,259
------- ------- ------- -------
Gross margin 3,662 2,297 12,182 7,914
Operating expenses:
Research and
development 825 509 2,685 1,663
Sales and marketing 1,142 709 3,917 2,465
General and
administrative 217 126 630 381
Payroll tax
on stock option
exercises 26 -- 51 --
Amortization of
goodwill and
purchased intangible
assets 169 19 291 61
Purchased in-process R&D 461 81 1,373 471
------- ------- ------- -------
Total operating
expenses 2,840 1,444 8,947 5,041
------- ------- ------- -------
Operating income 822 853 3,235 2,873
Net gains realized
on minority
investments 344 -- 531 --
Interest and other
income, net 197 93 577 330
------- ------- ------- -------
Income before
provision
for income taxes 1,363 946 4,343 3,203
Provision for
income taxes 567 341 1,675 1,180
------- ------- ------- -------
Net income $ 796 $ 605 $ 2,668 $ 2,023
======= ======= ======= =======
Net income per
share--basic $ .11 $ .09 $ .39 $ .30
======= ======= ======= =======
Net income
per share--diluted $ .11 $ .08 $ .36 $ .29
======= ======= ======= =======
Shares used in
per-share
calculation--basic 7,042 6,765 6,917 6,646
======= ======= ======= =======
Shares used in
per-share
calculation--diluted 7,556 7,201 7,438 7,062
======= ======= ======= =======
All historical financial information has been restated to reflect the acquisitions of StratumOne Communications, Inc. and TransMedia Communications, Inc. in the first quarter of fiscal 2000, and Cerent Corporation and WebLine Communications Corporation in the second quarter of fiscal 2000, and ArrowPoint Communications, Inc., InfoGear Technology, Corp., and SightPath, Inc. in the fourth quarter of fiscal 2000 which were accounted for as poolings of interests. In addition, the historical financial information has been restated to reflect the acquisition of Fibex Systems which was completed in the fourth quarter of fiscal 1999 and accounted for as a pooling of interests. The net income per share and number of shares used in the per-share calculation for all periods presented reflect the two-for-one stock split effective March 22, 2000.
Cisco Systems, Inc.
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CONDENSED CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
(In millions)
July 29, 2000 July 31, 1999
------------- -------------
Assets
Current assets:
Cash and short-term
investments $ 5,525 $ 2,102
Accounts receivable, net 2,299 1,250
Inventories, net 1,232 658
Deferred tax assets 1,091 580
Prepaid expenses and
other current assets 963 171
------- -------
Total current assets 11,110 4,761
Investments 13,688 7,032
Restricted investments 1,286 1,080
Property and equipment, net 1,426 825
Other assets 5,360 1,195
------- -------
Total assets $32,870 $14,893
======= =======
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and other
accrued expenses $ 4,963 $ 2,408
Income taxes payable 233 630
------- -------
Total current
liabilities 5,196 3,038
Deferred tax liabilities 1,132 --
Minority interest 45 44
Shareholders' equity 26,497 11,811
------- -------
Total liabilities and
shareholders' equity $32,870 $14,893
======= =======
All historical financial information has been restated to reflect the acquisitions of StratumOne Communications, Inc. and TransMedia Communications, Inc. in the first quarter of fiscal 2000, and Cerent Corporation and WebLine Communications Corporation in the second quarter of fiscal 2000, and ArrowPoint Communications, Inc., InfoGear Technology, Corp., and SightPath, Inc. in the fourth quarter of fiscal 2000 which were accounted for as poolings of interests. |
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