Copper Mountain Networks Announces Third Quarter 2001 Financial Results.Business Editors/High-Tech Writers PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif.--(BUSINESS WIRE)--Oct. 25, 2001 Copper Mountain Networks, Inc., (Nasdaq:CMTN), a provider of intelligent broadband access See broadband and wireless broadband. solutions, today announced financial results for the third quarter of 2001. Net revenue for the third quarter of 2001 was $5.1 million, compared with $6.1 million in the prior quarter. 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 loss for the third quarter of 2001 was $6.6 million, or $0.12 per pro forma share, compared to pro forma net loss of $9.1 million, or $0.17 per pro forma share in the prior quarter. The pro forma net loss for the third quarter of 2001 excludes pro forma adjustments of $17.0 million, which are comprised of stock-based compensation charges and a 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. . This pro forma net loss includes the application of an income tax rate of 42 percent. Net loss on a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis for the third quarter of 2001 was $28.3 million, or $0.53 per share, compared to a net loss of $73.8 million, or $1.39 per share in the prior quarter. "In the face of an extremely challenging economic environment, I am pleased with the progress Copper Mountain made in the third quarter," said Rick Gilbert Gil·bert , Walter Born 1932. American biologist. He shared a 1980 Nobel Prize for developing methods of mapping the structure and function of DNA. , chairman and chief executive officer of Copper Mountain Networks. "In particular, we are encouraged by the positive feedback we have received on our VantEdge(TM) Broadband Services See broadband and broadband service provider. Concentrator. Nine current and prospective customers, including two North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. ILECs, two of the three U.S. IXCs, and five CLECs in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , have signed up to trial the VantEdge."
Copper Mountain Networks' third quarter 2001 earnings conference call will be broadcast live today at 2:00 p.m. PST PST Paroxysmal supraventricular tachycardia, see there (5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. ) at www.coppermountain.com and also through www.streetevents.com. The dial-in number for the conference call is 1.866.503.1968. For replay telephone-access, dial 1.800.633.8284/858.812.6440 and enter the reservation number: 19788722. The telephone replay will be available for approximately 48 hours. The taped audio replay will be archived on Copper Mountain's Website for approximately 14 days following the call. About Copper Mountain Networks Copper Mountain Networks, Inc. (Nasdaq:CMTN) is a leading provider of intelligent broadband access solutions for carriers and service providers. The company offers a broad set of DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary and aggregation equipment for central office, digital loop, and multi-tenant In the Software as a Service (SaaS) software architecture, multi-tenant refers to the ability of the hosting site to support multiple organizations ("tenants") at the same time. Multi-tenancy is a key feature of a true SaaS architecture. unit (MTU (1) (Maximum Transmission Unit, Maximum Transfer Unit) The largest frame size that can be transmitted over the network. For example, an Ethernet MTU is 1,500 bytes. Messages longer than the MTU must be divided into smaller frames. ) networks worldwide. These products enable efficient and scalable deployment of advanced voice and data services while leveraging existing network infrastructures, reducing both capital and operational costs. Copper Mountain's products have been proven in some of the world's largest 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). network deployments. For more information please visit the company's World Wide Web site at http://www.coppermountain.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Warning Portions of this release contain 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 based on current expectations and are subject to risks and uncertainties, such as statements regarding customer acceptance of Copper Mountain's products. Copper Mountain wishes to caution you that there are some factors that could cause actual results to differ materially from the results indicated by such statements. These factors include, but are not limited to: our ability to penetrate the incumbent Refers to an entity that is currently in power. For example, in politics, the "incumbent senator" is the person who holds that office today. An "incumbent company" is an organization that has been providing goods and services for some time. See ILEC. telecommunications service provider A Telecommunications Service Provider or TSP is a type of Communications Service Provider that has traditionally provided telephone and similar services. This category includes ILECs, CLECs, and mobile wireless companies. (ILEC/IXC) market; market acceptance of our products; quarterly fluctuations in operating results attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the timing and amount of orders for our products; factors which could affect our profit margins or lead to increased expenses, such as pressures to reduce our product prices, increases in our costs of goods sold, and unforeseen increases in research and development expenses; the ability of our 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) customer base to raise sufficient capital to fund their operations and continue to order and pay for our products (including the risk that the Company will not be able to collect existing 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 from its customer base); rapid changes in the service provider landscape and among our CLEC customer base; the concentration of our revenue in a small number of customers; the rate of growth in our client base; factors affecting the rate of DSL deployment by our customers; our ability to keep pace with rapidly changing product requirements; factors affecting the demand for DSL technologies; the estimated charges, including restructuring charges, charges related to excess facilities, charges related to our ability to collect certain receivables, charges related to the investment in commercial paper of Southern California Edison Southern California Edison (or SCE Corp), the largest subsidiary of Edison International (NYSE: EIX), is the primary electricity supply company for much of Southern California. It provides 11 million people with electricity. , and charges for excess inventory, could be underestimated; the ability to realize sufficient revenues in the future to sustain or achieve profitability on an annual or quarterly basis (including the risk that from time to time the Company may need to 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. 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. ); the loss of services A deprivation of a family member, such as a parent or spouse, of the right to benefit from the performance of various duties, coupled with the privation of love and companionship, provided by the victim of a personal injury or Wrongful Death. of key personnel which could materially adversely affect our business; factors and market conditions affecting the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry, the market for DSL services, CLEC service providers, general economic conditions, and the extent and timing of the economic recovery, which are beyond Copper Mountain's ability to control. Prospective investors are cautioned not to place undue reliance on such forward-looking statements. Further, Copper Mountain expressly disclaims any obligation to update or revise any forward-looking statements contained herein to reflect future events or developments after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . We refer you to the documents Copper Mountain files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our 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 December: see month. 31, 2000 and other reports and filings made with the Securities and Exchange Commission. Note to Editors: Copper Mountain and all Copper Mountain product names are trademarks of Copper Mountain Networks, Inc. All other marks are the property of their respective owners.
Copper Mountain Networks, Inc.
Pro Forma Condensed Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2001 2000 2001 2000
Net revenue $ 5,112 $ 93,522 $ 19,327 $234,530
Cost of revenue 3,469 44,083 12,178 108,263
--------- --------- --------- ---------
Gross margin 1,643 49,439 7,149 126,267
Operating expenses:
Research and
development 8,035 10,365 30,483 25,537
Sales and marketing 2,755 9,967 14,641 25,000
General and
administrative 2,954 4,355 11,364 10,935
--------- --------- --------- ---------
Total operating
expenses 13,744 24,687 56,488 61,472
--------- --------- --------- ---------
Income (loss) from
operations (12,101) 24,752 (49,339) 64,795
Other income, net 789 2,549 3,878 6,482
--------- --------- --------- ---------
Income (loss) before
income taxes (11,312) 27,301 (45,461) 71,277
Provision (benefit)
for income taxes (4,751) 11,466 (19,094) 29,936
--------- --------- --------- ---------
Pro forma net
income (loss) $ (6,561) $ 15,835 $(26,367) $ 41,341
========= ========= ========= =========
Pro forma basic net
income (loss)
per share $ (0.12) $ 0.31 $ (0.50) $ 0.82
Basic common stock
equivalents 53,221 51,279 52,926 50,145
Pro forma diluted
net income (loss)
per share $ (0.12) $ 0.27 $ (0.50) $ 0.71
Diluted common
stock equivalents 53,221 58,440 52,926 58,173
The above Pro Forma Condensed Statements of Operations is not a
presentation in accordance with generally accepted accounting
principles as it excludes the effects of the following:
(1) The three months ended September 30, 2001 excludes $1.0
million of stock-based compensation, a restructuring charge of
$16.0 million, and the resulting loss before tax is taxed
utilizing a 42.0% tax rate. The nine months ended September
30, 2001 excludes $2.4 million of stock-based compensation, a
$40.8 million write-off of purchased intangibles, $5.3 million
of amortization of purchased intangibles, a $1.0 million
charge related to the investment in commercial paper of
Southern California Edison, $51.0 million of charges related
to excess inventory on hand and on order, a $2.6 million
charge related to the collectibility of certain receivables, a
$20.4 million restructuring charge, and the resulting loss
before tax is taxed utilizing a 42.0% tax rate.
(2) The three months ended September 30, 2000 excludes $0.8
million of stock-based compensation, $5.3 million in
amortization of purchased intangibles, and the resulting
income before tax is taxed utilizing a 42.0% tax rate. The
nine months ended September 30, 2000 excludes $3.0 million of
stock-based compensation, $12.4 million in amortization of
purchased intangibles, a $6.3 million write-off of purchased
intangibles, and the resulting income before tax is taxed
utilizing a 42.0% tax rate.
The pro forma data is presented for informational purposes only
and should not be considered as a substitute for the historical
financial data presented in accordance with generally accepted
accounting principles.
Copper Mountain Networks, Inc.
Condensed Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2001 2000 2001 2000
Net revenue $ 5,112 $ 93,522 $ 19,327 $234,530
Cost of revenue 3,469 44,083 12,178 108,263
Charge related to
excess inventory
on hand and on
order -- -- 51,000 --
--------- --------- --------- ---------
Gross margin 1,643 49,439 (43,851) 126,267
Operating expenses:
Research and
development 8,035 10,365 30,483 25,537
Sales and marketing 2,755 9,967 14,641 25,000
General and
administrative 2,954 4,355 11,363 10,935
Amortization of
purchased
intangibles -- 5,329 5,327 12,427
Amortization of
deferred stock
compensation 1,014 811 2,397 3,007
Restructuring and
other non-recurring 16,000 -- 23,000 --
Write-off of in-
process research
and development -- -- -- 6,300
Write-off of
purchased
intangibles -- -- 40,833 --
--------- --------- --------- ---------
Total operating
expenses 30,758 30,827 128,044 83,206
--------- --------- --------- ---------
Income (loss)
from operations (29,115) 18,612 (171,895) 43,061
Other income, net 789 2,549 2,858 6,482
--------- --------- --------- ---------
Income (loss)
before income taxes (28,326) 21,161 (169,037) 49,543
Provision for
income taxes -- 9,086 -- 13,464
--------- --------- --------- ---------
Net income (loss) $(28,326) $ 12,075 $(169,037) $ 36,079
========= ========= ========= =========
Basic net income
(loss) per share $ (0.53) $ 0.24 $ (3.19) $ 0.72
Basic common stock
equivalents 53,221 51,279 52,926 50,145
Diluted net income
(loss) per share $ (0.53) $ 0.21 $ (3.19) $ 0.62
Diluted common
stock equivalents 53,221 58,440 52,926 58,173
Condensed Balance Sheets
(in thousands)
Sept. 30, Dec 31,
Assets 2001 2000
Current assets:
Cash and S-T investments $ 81,206 $162,616
Accounts receivable 2,894 19,496
Inventory 13,376 26,405
Other current assets 1,645 7,961
--------- ---------
Total current assets 99,121 216,478
Property and equip., net 11,271 24,961
Other assets 2,166 17,287
Purchased intangibles -- 46,159
--------- ---------
$112,558 $304,885
========= =========
Liabilities and Sept. 30, Dec 31,
Stockholders' Equity 2001 2000
Current liabilities:
Accounts payable $ 20,609 $ 23,963
Accrued liabilities 13,436 17,351
Adverse purch. commit. 11,173 28,600
Current notes payable 3,133 3,177
--------- ---------
Total current liabilities 48,351 73,091
Notes payable 4,320 6,654
Other liabilities 234 314
Total stockholders' equity 59,653 224,826
--------- ---------
$112,558 $304,885
========= =========
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