Madge Networks N.V. Fourth Quarter and Fiscal 2000 Results.Business Editors AMSTERDAM Amsterdam, city, Netherlands Amsterdam (ăm`stərdăm', Dutch ämstərdäm`), city (1994 pop. 724,096), constitutional capital and largest city of the Kingdom of the Netherlands, North Holland prov. , The Netherlands--(BUSINESS WIRE)--March 7, 2001 Madge Networks Madge Networks NV. founded by Robert Madge and best known for its work with Token Ring, was a global leader and pioneer of high speed networking solutions in the mid 1990s, and also made significant contributions to technologies such as Asynchronous Transfer Mode (ATM) and Ethernet. N.V. (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 NM:MADGF), a global network solutions provider, today announced results for its fourth fiscal quarter and full financial year ended December December: see month. 31, 2000.(A) Operating highlights at Madge Networks companies during the fourth quarter include: - Madge.web(TM) expands European operations with opening of Amsterdam regional office to manage sales, marketing, consultancy and support in the Netherlands, Belgium and Luxembourg; - Madge.web and Magnifi form strategic alliance to provide global businesses with rich content management and marketing collaboration solutions; - Madge.connect(TM) continues progress on cost reduction and gross margin improvement, significantly increasing EBITDA from previous quarter; - Red-M(TM) launches world's first Bluetooth(TM) networking product solution for delivery of next generation mobile services across a wide range of applications; - Red-M to provide Toshiba with core BIAS(TM) (Bluetooth Internet Access Server) software technology and Red-M 1000AP access point products, enhancing Toshiba's personal connectivity solutions for its customers; and - Red-M wins PC Magazine's 2000 Technical Innovation Award for pioneering Bluetooth technology. Madge Networks revenues for the fourth quarter were US$33.6 million, compared to revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the third quarter of $34.3 million and revenues from continuing operations for the fourth quarter of 1999 of $47.1 million. Revenues from continuing operations exclude results of the Video Networking business sold by Madge.connect in the third quarter of 2000. The net loss for the fourth quarter was $17.3 million, or $(0.32) per share, compared to a net loss from continuing operations of $21.0 million, or $(0.45) per share, for the third quarter of 2000. The net loss from continuing operations for the fourth quarter of 1999 was $4.7 million, or $(0.12) per share. For the 2000 fiscal year Madge reported revenues from continuing operations of $146.4 million, compared to revenues from continuing operations of $176.9 million for the twelve months ended December 1999. The net loss from continuing operations for 2000 was $76.1 million, or $(1.63) per share, against a comparable net loss of $33.1 million, or $(0.82) per share, for 1999. Including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , Madge Networks revenues for the fourth quarter of 2000 were $33.6 million, compared to third quarter revenues of $37.3 million and revenues of $51.8 million for the fourth quarter of 1999. The net loss for the quarter was $18.0 million, or $(0.34) per share, compared to a net loss of $21.7 million, or $(0.46) per share, for the third quarter of 2000. The net loss for the fourth quarter of 1999 was $5.3 million, or $(0.13) per share. For the 2000 fiscal year Madge reported revenues of $156.5 million, compared to $196.2 million for the twelve months ended December 1999. The net loss for the year ended December 2000 was $77.7 million, or $(1.67) per share, compared to a net loss of $40.3 million, or $(1.00) per share, for 1999. Madge Networks ended the fourth quarter with $37.8 million in cash, including $4.9 million that is restricted. During the first quarter of 2001, the Company has received $8.2 million in cash from a major supplier as performance related consideration on a business we sold to them in 1998. The Company believes that its cash position and currently available lines of credit are sufficient to cover its growth plans for the first half of 2001. The Company will need to raise additional funding by the third quarter of 2001 to enable it to continue under its existing plans. The Company is actively pursuing private equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. for both the Red-M and Madge.web businesses, and believes it is well advanced in achieving funding for Red-M. If sufficient financing directly into the businesses cannot be secured, the Company will modify its plans or pursue other options, such as to sell some of its holdings, shares in its subsidiaries or shares in the Company itself, in order to raise funds. (A) For the purposes of presentation, the Company has indicated its fiscal quarters within the year as ending on the calendar month end, whereas, in fact, the Company operates on the basis of thirteen-week financial quarters. Madge.web
Financial Highlights Three months ended
(Unaudited, in thousands) Dec. 31, Sep. 30,
2000 2000
Sales $7,064 $8,261
Gross loss $(10,203) $(7,188)
EBITDA (loss) $(18,695) $(15,716)
Twelve months ended
Dec. 31, Dec. 31,
2000 1999
Sales $30,632 $27,359
Gross loss $(29,351) $(5,718)
EBITDA (loss) $(62,099) $(35,191)
Quarterly highlights and recent developments Madge.web is a global provider of rich content applications, content distribution and managed network services. Madge.web revenues for the fourth quarter were $7.1 million, compared with third quarter revenues of $8.3 million. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become loss was $18.7 million in the quarter. Fourth quarter results reflect market conditions that impacted customer purchasing decisions, and some delay in Internet-related spending. Revenues and EBITDA losses were also impacted by tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic reductions and exceptional credit notes. Revenues for our advanced IP-based network and application services See ASP and Web services. increased 25 per cent to $1.0 million in the fourth quarter. For the 2000 fiscal year Madge.web reported revenues of $30.6 million, compared to $27.4 million for 1999. EBITDA loss for 2000 was $62.1 million. During the fourth quarter, Volendam Volendam (vô'ləndäm`), town, North Holland prov., N central Netherlands, on the IJsselmeer, near Amsterdam. A picturesque town largely unchanged since the 17th cent., it is a famous tourist spot and is much frequented by artists. Investeringen N.V. finalized See finalization. its previously announced commitment to purchase $30 million of convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. of Madge.web. "Although quarter four was difficult, and we are having to be more cautious about the speed with which our business will build in 2001, we are continuing to pursue our growth strategy," said Robert Madge Robert Madge is an entrepreneur and technologist. In the 1980s, he founded Madge Networks, a pioneer of high speed networking technology. He is currently the President of IDTrack, a European Association for identification and traceability of goods based on technologies such as RFID. , 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. , Madge.web. "During the quarter, we significantly enhanced our infrastructure and strengthened our organization to deliver rich content management and distribution services that help companies successfully implement e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. strategies by maximizing the value of their digital assets. Working with our strategic partner Inktomi (Inktomi Corporation, Foster City, CA, www.inktomi.com) A company that specializes in high-performance software for Internet service providers (ISPs), carriers and large Web sites. , we have rolled out our Content Distribution Network to 21 sites in 15 countries -- running on our private, high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" Overnet, which bypasses congestion The condition of a network when there is not enough bandwidth to support the current traffic load. congestion - When the offered load of a data communication path exceeds the capacity. points on the public 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 . We have brought in additional experienced management, and have opened offices in all major European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. countries to complement our operations in Asia and the U.S. We are now ready to leverage the significant assets we have deployed, and have put a total of 40 quota-carrying sales people to work to translate (1) To change one language into another; for example, assemblers, compilers and interpreters translate source language into machine language. (2) In computer graphics, to move an image on screen without rotating it. our investments into orders." Madge.connect - continuing operations(B)
Financial Highlights Three months ended
(Unaudited, in thousands) Dec. 31, Sep. 30,
2000 2000
Sales $26,532 $26,043
Gross profit $14,088 $11,624
EBITDA $10,182 $4,756
Twelve months ended
Dec. 31, Dec. 31,
2000 1999
Sales $115,802 $149,509
Gross profit $55,990 $77,480
EBITDA $21,450 $5,975
(B) September September: see month. 30, 2000 Quarter results are restated for the sale of Madge.connect's Video Networking business, disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of in the third quarter. Quarterly highlights and recent developments Madge.connect is a global supplier of mission critical Token Ring A local area network (LAN) access method developed by IBM. Conforming to the IEEE 802.5 standard, Token Ring uses a token ring access method and connects up to 255 nodes in a star topology at 4, 16 or 100 Mbps. LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. product solutions for enterprises, and is the market leader in Token Ring. Madge.connect revenues for the fourth quarter were $26.5 million, compared with revenues from continuing operations of $26.0 million for the third quarter of 2000. Revenues from continuing operations exclude results of the Video Networking business sold by Madge.connect in the third quarter of 2000. EBITDA was $10.2 million for the quarter, compared to EBITDA from continuing operations of $4.8 million for the third quarter of 2000. For the 2000 fiscal year, Madge.connect reported revenues from continuing operations of $115.8 million, against a comparable $149.5 million for the twelve months ended December 1999. EBITDA from continuing operations was $21.5 million for the year ended December 2000. "We are very pleased by the improved performance of our Madge.connect business," said Chris CHRIS Chemical Hazards Response Information System (US DoD) CHRIS California Historical Resources Information System CHRIS Computerized Human Resources Information System CHRIS Command Human Resources Intelligence System Bradley, Chief Financial Officer of Madge Networks. "While we benefited from some non-recurring gains in the fourth quarter, the underlying profitability and cash generation of Madge.connect have significantly improved sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen ." Red-M Red-M is a pioneering developer of Bluetooth A wireless personal area network (WPAN) standard for short-range transmission of digital voice and data. Bluetooth is widely used for hands-free cellphone operation, including wireless headsets and connecting to Bluetooth-enabled automobiles that turn the car's audio system into a networking product solutions. EBITDA loss was $4.5 million in the fourth quarter compared to $3.5 million in the third quarter of 2000, reflecting continued investment in Research & Development. During the fourth quarter Red-M announced partnerships with Toshiba Toshiba Corporation (株式会社東芝 Kabushiki-gaisha Tōshiba and a number of companies including Extended Systems, Insite and Key Tools. "In October October: see month. we announced the world's first Bluetooth networking product solution. We shipped products for proof of concept in the fourth quarter, although we did not recognize revenue in the quarter," said Michael Wilson Michael Wilson may refer to:
Conference Call Investors will have the opportunity to listen to management's discussion of its fourth quarter 2000 results in a conference call to be held on Thursday Thursday: see week. , March 8 at 8:30 a.m. (Eastern Time) over the Internet. To listen to the live call please go to our web site, www.madge.com, at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. A replay of the conference call will be available on March 8 by dialing 800-633-8284 (858-812-6440 for international callers), reservation #18127913, or by visiting our web site. About Madge Networks N.V. Madge Networks N.V. (NASDAQ NM:MADGF) is a global provider of advanced Internet-centric network services and products, and mission-critical enterprise solutions. The company operates through three primary subsidiaries: Madge.web, a global provider of rich content applications, content distribution and managed network services; Madge.connect, a global supplier of Token Ring LAN product solutions for mission-critical enterprise networks; and Red-M, a pioneering developer of Bluetooth networking solutions that enable access to a range of voice, video and data from a range of mobile devices. The company's main business centers are located in Wexham Springs, United Kingdom; New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. and Milpitas, California Milpitas (IPA pronunciation: mɪlpitʌs; inhabitants are called 'Milpitans') is a city in Santa Clara County, California. It is located with San Jose to its south and Fremont to its north, at the eastern end of Highway 237 and generally between Interstate freeways 680 and . Information about Madge's complete range of products and services can be accessed at www.madge.com. About Madge.web Madge.web is a global provider of rich content applications, content distribution and managed network services. These services are delivered via the company's Overnet, by-passing the public Internet, to more than 30 countries around the world. Rich content services from Madge.web - architected to handle on-line video, audio, images and interactive media - include encoding See encode. services, virtual private networking, managed hosting, storage, streaming media See streaming audio, streaming video and digital media hub. distribution, marketing services and workflow The automatic routing of documents to the users responsible for working on them. Workflow is concerned with providing the information required to support each step of the business cycle. management. Further information about Madge.web can be accessed at www.madgeweb.com. About Madge.connect Madge.connect is a global supplier of Token Ring LAN product solutions for mission-critical enterprise networks. As the market leader in Token Ring, Madge.connect pioneers next generation networking Next Generation Networking (NGN) is a broad term to describe some key architectural evolutions in telecommunication core and access networks that will be deployed over the next 5-10 years. solutions which enable the painless pain·less adj. Free from complication or pain: a painless operation. pain  less·ly adv. deployment of 100Mbps and Gigabit-IP
based applications within existing corporate networks while protecting
customers' investments in Token Ring and ATM.About Red-M Launched in May 2000, Red-M is a pioneering developer of Bluetooth networking solutions. Red-M's BIAS(TM) (Bluetooth Internet Access Server) technology provides advanced data, voice and video services to a range of Bluetooth enabled devices including computers, personal digital assistants (PDAs), wireless application protocol (WAP (1) (Wireless Access Point) See access point. (2) (Wireless Application Protocol) A standard for providing cellular phones, pagers and other handheld devices with secure access to e-mail and text-based Web pages. ) smart phones and other emerging information appliances See Internet appliance. (hardware) Information Appliance - (IA) A consumer device that performs only a few targeted tasks and is controlled by a simple touch-screen interface or push buttons on the device's enclosure. . Information on Red-M can be found at www.red-m.com. 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 Statement Investors should take note that certain statements in this press release are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and may not give full weight to all of the potential risks (e.g., the need for additional funds which may not be available upon acceptable terms or at all, which would adversely impact the Company's ability to implement its existing plans and, which we have been told by our auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together , will result in a "going concern" qualification from them in the Company's 2000 Financial statements as we do not currently have specific funding in place to meet our financial needs for a 12-month period; changing technologies; competition; planned service and product launches; management of change and changed resource allocation resource allocation Managed care The constellation of activities and decisions which form the basis for prioritizing health care needs resulting from these and other factors). 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. in this press release include statements that refer to the Company believing that its cash position and currently available lines of credit are sufficient to cover its growth plans for the first half of 2001, the Company needing to raise additional funding by the third quarter of 2001 to enable it to continue under its existing plans, the Company needing to secure financing and if it cannot do that, that it will modify its plans or pursue other options, such as to sell some of its holdings, shares in its subsidiaries or shares in the Company itself, in order to raise funds, to Madge.web being ready to leverage the significant assets that it has deployed and other statements which are not completely historical. These statements may differ materially from actual future actions, events or results. For more information on risks, please refer to Madge's recent SEC filings. Madge, the Madge logo, Madge.web, Madge.connect, Red-M and Red-M BIAS are trademarks, and in some jurisdictions may be registered trademarks of Madge Networks or its affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. . Other trademarks appearing in this release are those of their respective owners.
Madge Networks N.V.
Condensed Consolidated Balance Sheets(a)
(Unaudited)
(in thousands)
Dec. 31, Dec. 31,
2000 1999
---------------- -----------------
Assets
Current assets:
Cash, cash equivalents,
and short-term
investments(b) $37,776 $29,971
Accounts receivable,
net 16,022 38,655
Inventories 7,571 16,160
Prepaid expenses and
other current assets 19,780 10,802
---------------------------------------------------------------------
Total current assets 81,149 95,588
Investments, property
and equipment, net 73,141 44,834
Intangible assets,
net 40,748 52,076
---------------------------------------------------------------------
Total assets $195,038 $192,498
=====================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and
accrued liabilities $83,353 $92,639
Income taxes payable 11,758 16,715
Short-term borrowings 241 7,107
Short-term obligations 6,937 3,298
---------------------------------------------------------------------
Total current
liabilities 102,289 119,759
Long-term obligations 12,461 3,563
---------------------------------------------------------------------
Total liabilities 114,750 123,322
Minority interest 29,835 -
Shareholders' equity 50,453 69,176
---------------------------------------------------------------------
Total liabilities and
shareholders' equity $195,038 $192,498
=====================================================================
(a) The condensed consolidated results include Madge.web,
Madge.connect, Red-M and Madge Group Companies.
(b) Cash includes a balance of $4.9M at December 31, 2000 and $10.5M
at December 31, 1999 that had restricted use.
Madge Networks N.V.
Condensed Consolidated Statements of Operations(a)
(Unaudited)
(in thousands)
Results of Continuing Group Results
Operations(b) (Incl. Discontinued
Operations)
Three months ended Three months ended
December 31, December 31,
2000 1999 2000 1999
Madge.web sales $7,064 $6,789 $7,064 $6,789
Madge.connect sales 26,532 40,271 26,532 45,014
----------------------------------------------------------------------
Net sales 33,596 47,060 33,596 51,803
Cost of sales 29,809 29,101 30,660 31,550
----------------------------------------------------------------------
Gross profit 3,787 17,959 2,936 20,253
Operating expenses:
Sales & marketing 15,568 18,215 15,483 19,353
Research &
development 3,090 5,140 3,107 6,859
General and
administrative 6,166 7,831 6,146 7,825
Special charges (3,500) (8,777) (3,500) (8,777)
----------------------------------------------------------------------
Total operating
expenses 21,324 22,409 21,236 25,260
----------------------------------------------------------------------
Loss from
operations (17,537) (4,450) (18,300) (5,007)
Net interest
(expense)
income 91 160 91 160
----------------------------------------------------------------------
Loss before tax (17,446) (4,290) (18,209) (4,847)
Income tax
provision
(benefit) (178) 409 (178) 409
----------------------------------------------------------------------
Net loss $(17,268) $(4,699) $(18,031) $(5,256)
======================================================================
Earnings per share
Basic $(0.32) $(0.12) $(0.34) $(0.13)
Diluted $(0.32) $(0.12) $(0.34) $(0.13)
Weighted Average
Shares Outstanding
Basic 53,798 40,305 53,798 40,305
Diluted 53,798 40,305 53,798 40,305
(a) The condensed consolidated results include Madge.web,
Madge.connect, Red-M and Madge Group Companies.
(b) Results of Continuing Operations exclude Madge.connect's Video
Networking business, disposed of in the third quarter, 2000.
Madge Networks N.V.
Condensed Consolidated Statements of Operations(a)
(Unaudited)
(in thousands)
Results of Continuing Group Results
Operations(b) (Incl. Discontinued
Operations)
Twelve months ended Twelve months ended
December 31, December 31,
2000 1999 2000 1999
Madge.web sales $30,632 $27,359 $30,632 $27,359
Madge.connect
sales 115,802 149,509 125,909 168,793
----------------------------------------------------------------------
Net sales 146,434 176,868 156,541 196,152
Cost of sales 119,894 105,107 126,611 115,547
----------------------------------------------------------------------
Gross profit 26,540 71,761 29,930 80,605
Operating expenses:
Sales & marketing 64,806 67,101 65,895 73,145
Research &
development 16,224 24,051 19,124 33,230
General and
administrative 24,171 22,472 24,354 23,340
Special charges (3,500) (7,540) (2,618) (7,540)
----------------------------------------------------------------------
Total operating
expenses 101,701 106,084 106,755 122,175
----------------------------------------------------------------------
Loss from operations (75,161) (34,323) (76,825) (41,570)
Net interest
(expense) income (710) 2,195 (710) 2,195
----------------------------------------------------------------------
Loss before tax (75,871) (32,128) (77,535) (39,375)
Income tax
provision 201 938 201 938
----------------------------------------------------------------------
Net loss $(76,072) $(33,066) $(77,736) $(40,313)
======================================================================
Earnings per share
Basic $(1.63) $(0.82) $(1.67) $(1.00)
Diluted $(1.63) $(0.82) $(1.67) $(1.00)
Weighted Average Shares
Outstanding
Basic 46,672 40,420 46,672 40,420
Diluted 46,672 40,420 46,672 40,420
(a) The condensed consolidated results include Madge.web,
Madge.connect, Red-M and Madge Group Companies.
(b) Results of Continuing Operations exclude Madge.connect's Video
Networking business, disposed of in the third quarter, 2000.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion