CrossKeys Announces Record Revenue for the Fourth Quarter And Fiscal Year Ended May 31, 2000 : CrossKeys reports 21% quarter over quarter revenue growth.Business Editors KANATA, CANADA--(BUSINESS WIRE)--July 6, 2000 CrossKeys Crosskeys is a small village in South East Wales. Located near to the confluence of the Ebbw River and the River Sirhowy, it was originally called Pont-y-cymer. The name 'Crosskeys' is taken from the name of the local hotel. Systems 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 :CKEY)(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CKY CKY Camp Kill Yourself (band) CKY Conakry, Guinea - Conakry (Airport Code) .) today announced record sales for the fourth quarter and fiscal year ended May 31, 2000. For the fourth quarter ended May 31, 2000 CrossKeys reported revenue of $14.5 million versus $5.2 million for the corresponding period in the prior year, an increase of 182%. The net loss for the three months ended May 31, 2000, excluding amortization of goodwill and intangibles, was $1.7 million or $(0.09) Cdn per share compared to a net loss of $6.8 million or $(0.37) Cdn per share in the same period in the prior year. During the fiscal year CrossKeys acquired Dynamic Broadband Networks  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. , Inc. and certain software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. for an aggregate of $21 million to expand the Company's product line in broadband access See broadband and wireless broadband. and IP applications. Including amortization of goodwill and intangibles from these acquisitions, CrossKeys reported a net loss for the three months ended May 31, 2000 of $4.1 million. Fully 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. loss per share for the fourth quarter of fiscal 2000 was $(0.22) Cdn, based on 18.7 million average shares outstanding, versus a loss of $(0.37) Cdn per share in the fourth quarter of fiscal 1999, based on 18.5 million average shares outstanding. Fully diluted loss per share for the fourth quarter of fiscal 2000 was $(0.15) US, translated at the average exchange rate for the quarter of $0.6767 as reported by the Federal Reserve Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. . For the year ended May 31, 2000, CrossKeys reported revenue of $45.1 million versus $43.8 million for the fiscal year ended May 2, 1999. Before amortization of goodwill and intangibles, and in-process research and development expenses associated with our technology acquisitions, the Company reported a net loss of $5.9 million or $(0.32) Cdn per share compared to a net loss of $1.5 million or $(0.08) Cdn per share in fiscal year ended May 2, 1999. Including the amortization of goodwill and intangibles, and in-process research and development expenses, CrossKeys reported a net loss of $13.1 million for the year ended May 31, 2000. Fully diluted loss per share for fiscal 2000 was $(0.70) Cdn based on 18.6 million average shares outstanding versus a loss per share of $(0.08) Cdn for the fiscal 1999 year end, based on 18.4 million shares outstanding. Fully diluted loss per share for the year ended May 31, 2000 was $(0.48) US translated at the average exchange rate for the fiscal year of $0.6798 as reported by the Federal Reserve Bank of New York. "Our continued revenue growth is a clear indicator that our new business model has started to pay off," said Ian McLaren, 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. , CrossKeys. "Our record revenue is based on dramatic increases in core product sales-from 60 percent of total revenue last year to 90 percent this year. With this focus on product revenue, our gross margins have improved from 70 percent last year to 79 percent for fiscal year 2000. Driving our product sales growth was the increase in the number of employees in the Americas A·mer·i·cas , the See America. 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). . Through
their efforts, we nearly doubled our revenue coming from the
fast-growing new alternate carriers, especially with CLEC's in the
US."
Mr. McLaren also said, "Our successful acquisition of Dynamic Broadband Networks, and the subsequent launch and sales of the first product from the acquisition, underlines our strategy to expand our product portfolio. We have already set teams to work on bringing four new CrossKeys products to market for this fiscal year. CrossKeys has changed its direction and increased our capacity in the field. There are numerous challenges ahead but we have the muscle to meet them and the foundation necessary for profitability." Significant highlights during the year and quarter included: * Achieved record bookings, revenue and gross margins for the fourth quarter and fiscal year. * Grew core product revenue by 57% in fiscal 2000. * Increased gross margins to 79% in fiscal 2000 from 70% in fiscal year 1999. * Doubled our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market with the acquisition of Dynamic Broadband Networks and the introduction of CrossKeys Dyband(TM) software. * Signed our first CrossKeys Dyband(TM) customer and value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. (VAR). * Increased market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" through the Alcatel channel. * Quadrupled our number of industry relationships, to include Alcatel, Ericsson, Marconi, Tivoli, Fujitsu, Portal, Eftia, Parc, Orchestream and Storm. * Diversified diversified (di·verˑ·s our customer base with 91% growth in revenue from 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) and other emerging markets. About CrossKeys CrossKeys Systems Corporation (www.crosskeys.com) develops software that makes 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 work for business. More than 200 of the world's largest and most demanding service providers manage the equipment and traffic end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. on their telecom networks with CrossKeys. CrossKeys Systems Corporation is a public company whose common shares are listed for trading on Nasdaq (CKEY) in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (CKY) in Canada. CrossKeys and logo are registered trademarks of CrossKeys Systems Corporation. All other trademarks are the property of their respective holders and are acknowledged by CrossKeys Systems Corporation. This announcement may 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. as defined by the US Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, such as statements related to the industry motivators, market and partnership opportunities. The Company cautions that these statements are based on current expectations that are subject to risks and uncertainties. Actual results may differ due to factors such as customer demand, product shipping schedules, product mix, competitive products and pricing pressures, and changes in the service, network and element management software applications market specifically. Additional information identifying risks and uncertainties is contained in the Company's filings with the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. and the Securities and Exchange Commission. Summary of financials follows:
CROSSKEYS SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Canadian dollars, amounts in thousands, except per share data,
US GAAP)
Fiscal quarters ended For the Year ended
May 31, May 2, May 31, May 2,
2000 1999 2000 1999
-----------------------------------------------
(unaudited) (unaudited)
Product revenue $ 13,013 $ 4,147 $ 39,887 $ 36,254
Service revenue 1,534 1,008 5,242 7,551
-----------------------------------------------
Total revenue 14,547 5,155 45,129 43,805
-----------------------------------------------
Product costs 1,952 2,156 6,735 9,951
Service costs 849 517 2,818 3,354
-----------------------------------------------
Total cost of sales 2,801 2,673 9,553 13,305
-----------------------------------------------
Gross margin 11,746 2,482 35,576 30,500
-----------------------------------------------
Expenses
Research and development 5,872 3,224 17,750 9,781
Selling, general and
Administration 7,913 5,323 26,996 20,191
Amortization of goodwill
and intangibles 2,329 - 3,396 -
In-process research and
Development - - 3,818 -
Provision for
uncollectible amounts - - - 1,000
Restructuring charge - 3,765 - 3,765
-----------------------------------------------
Total expenses 16,114 12,312 51,960 34,737
-----------------------------------------------
Loss from operations (4,368) (9,830) (16,384) (4,237)
Interest income, net 311 690 1,964 2,787
-----------------------------------------------
Loss before income taxes (4,057) (9,140) (14,420) (1,450)
Income tax recovery - 2,301 1,330 -
-----------------------------------------------
Net loss (4,057) (6,839) (13,090) (1,450)
-----------------------------------------------
-----------------------------------------------
Earnings per share
Basic $ (0.22) $ (0.37) $ (0.70) $ (0.08)
Fully Diluted $ (0.22) $ (0.37) $ (0.70) $ (0.08)
Weighted average number
of common shares
outstanding
Basic 18,688 18,503 18,572 18,386
Fully Diluted 18,688 18,503 18,572 18,386
CROSSKEYS SYSTEMS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Canadian dollars, amounts in thousands, except per share data,
US GAAP)
May 31, May 31,
2000 1999
-------------------
ASSETS
Cash and short-term investments $ 16,650 $ 53,426
Accounts receivable 15,818 5,463
Unbilled receivables 1,598 4,438
Fixed assets 8,360 5,693
Goodwill and intangible assets 18,083 -
Other assets 7,680 8,124
-------------------
$ 68,189 $ 77,144
-------------------
-------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 8,497 $ 5,348
Deferred revenue 2,238 1,320
-------------------
10,735 6,668
Shareholders' equity 57,454 70,476
-------------------
$ 68,189 $ 77,144
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