Newbridge Networks Announces Record Revenue for First Quarter Fiscal Year 2000.KANATA, Ontario--(BUSINESS WIRE)--Aug. 24, 1999-- Continued Strong Growth in ATM Enables Company to Exceed Expectations Newbridge Networks Newbridge Networks was an Ottawa, Ontario, Canada company founded by Canadian/Welsh entrepreneur Terry Matthews. It was founded in 1986 to create data and voice networking products after Matthews was forced out of his original company Mitel. Corporation (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :NNC NNC NASCAR Nextel Cup (stock car racing circuit) NNC National Neighborhood Coalition NNC Naga National Council (India) NNC Neural Network Council (IEEE) )(NYSE NYSE See: New York Stock Exchange :NN) today announced financial results for the first quarter of fiscal year 2000, ending August 1, 1999. Revenue for the quarter was $495 million, a record for the Company, and an increase of 8 percent over the previous quarter. Net earnings for the quarter were $47 million -- 26c per share basic and 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. under Canadian GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , or U.S. 18c per share basic and diluted under U.S. GAAP -- an increase of 50 percent compared with the previous quarter. "This was a solid quarter," said Alan Lutz, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Newbridge Networks. "We said we were going to fix our supply line management issues and we largely have. We said we were going to achieve significant growth and we did. We said we were going to control expenditures and margins and we did. I want to thank all Newbridge employees for significantly improving our credibility with investors." WAN packet revenue grew by more than 12 percent sequentially to reach $357 million in the quarter, representing 72 percent of total revenue and resulting in record WAN packet revenue. WAN packet revenue growth was driven by 16 percent sequential growth in the Company's flagship broadband multiservice platform and the industry's best selling ATM system, the MainStreetXpress(TM) 36170 Multiservices Switch. Sales of the 36170 switch were more than double that of the previous year's first quarter, as the platform continues to capture market share, growing at approximately twice the annual growth rate for the overall ATM WAN market. There were approximately 140 customers for the MainStreetXpress 36170 system in the quarter -- a record number of 36170 customers for any quarter -- including 28 new customers. This brings the total number of customers for the platform to over 380. Customers include most of the largest service providers in the world. The Company has received strong interest from all clients in the 50 Gbit/sec and 320 Gbit/sec expanded versions of the 36170 Multiservices Switch. These systems are scheduled for trials later this fiscal year. Company management continued to closely control operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . First quarter operating expenses were $209 million, an increase of only $3 million from the prior quarter, despite the fact that the Company's common salary review date of May 1st resulted in an increase in payroll expenses in the quarter of approximately $12 million compared with the prior quarter. "As we entered the quarter I stated that our objective was to achieve the revenue and earnings goals for the quarter -- traditionally the lightest quarter of the fiscal year -- without significantly diminishing di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. the record level of backlog we had built," continued Mr. Lutz. "With the revenue and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. numbers we posted, and a book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can of approximately one, we achieved this objective. "We have implemented a great deal of change over the past year to strengthen Newbridge. Significant reorganization has been completed. New blood and fresh ideas have been injected in·ject·ed adj. 1. Of or relating to a substance introduced into the body. 2. Of or relating to a blood vessel that is visibly distended with blood. injected 1. introduced by injection. 2. congested. into the Company through the addition of new executives to the leadership team. The product portfolio has been expanded and rejuvenated re·ju·ve·nate tr.v. re·ju·ve·nat·ed, re·ju·ve·nat·ing, re·ju·ve·nates 1. To restore to youthful vigor or appearance; make young again. 2. . The supply line management issues outlined at the beginning of the quarter have been largely rectified rectified refined; made straight. , eliminating the constraint Constraint A restriction on the natural degrees of freedom of a system. If n and m are the numbers of the natural and actual degrees of freedom, the difference n - m is the number of constraints. on our ability to grow the business. I believe we are well positioned to take advantage of the opportunities created by the rapidly expanding networking market. Client response to our broadband access See broadband and wireless broadband. products has been exceptional. Adding to our enthusiasm is early reaction to our differentiated IP services offering, and, in particular, our Digital Multimedia Distribution System." This news release may include certain 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. that involve risks and uncertainties. Actual results may differ materially from results indicated in any forward-looking statements. The Company cautions that, among other things, in view of the rapid technological changes in the networking industry, if technologies or standards supported by the Company's products or common carrier service offerings based on the Company's products become obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. or fail to gain widespread commercial acceptance, the Company's business may be adversely affected. Additional information identifying risks and uncertainties is contained in the Company's most recent Form 10-Q Form 10-Q See 10-Q. quarterly report and 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. annual report filed with the SEC. Newbridge Networks designs, manufactures, markets and services wide area networking solutions for Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. ; local, long-distance, and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. companies; cable television carriers; and corporate customers in more than 100 countries. The Company leverages its relationship with a growing family of Newbridge Affiliate companies and strategic alliances with numerous other networking companies to deliver complete, end-to-end solutions (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. . Newbridge customers include the world's 350 largest telecommunications service providers 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. and more than 10,000 corporations, government organizations and other institutions. Founded in 1986, the Company employs more than 6,000 people on six continents Six Continents is a large retail PLC in UK which split into Six Continents Retail known as Mitchells and Butlers plc. The hotels and soft drinks business of Six Continents PLC is now known as InterContinental Hotels Group PLC. . News and information are available at www.newbridge.com. Newbridge and logo are registered trademarks of Newbridge Networks Corporation. Newbridge Networks is pleased to invite you to attend our conference call to discuss the Company's financial results for first quarter, fiscal 2000. The conference call will be held today, Tuesday, August 24th at 5:30 p.m. Eastern Daylight Time (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). Please join us via audio telephone conference or through an audio Web cast. The news release and the presentation graphic support material will be available on the Newbridge Web site at www.newbridge.com. Telephone Conference Call -- Please call in 10 minutes prior to the start of the call -- 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. : 1-800-553-2165 -- International: 1-303-267-1000 Audio Web cast (listen only mode) -- Simulcast: Newbridge Web site: www.newbridge.com -- Instant replay: Available until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 7, 1999
Newbridge Networks Corporation
Condensed Consolidated Statements of Earnings (unaudited)
(Canadian dollars in thousands, except per share data)
Fiscal quarters ended
-----------------------------
August 1, August 2,
1999 1998
--------- ----------
Sales $495,070 $426,056
Cost of Sales 215,521 176,562
--------- ----------
Gross Margin 279,549 249,494
Expenses
Selling, general
and administrative 141,037 129,039
Research and development 67,621 67,156
Amortization of acquired
intangibles 2,745 927
----------- -----------
Income from operations 68,146 52,372
Net gain on investments 3,512 -
Other expense (1,332) (1,598)
--------- ----------
Earnings before income taxes
and non-controlling interest 70,326 50,774
Provision for income taxes 21,705 14,978
Non-controlling interest 1,335 276
--------- ----------
Net earnings $ 47,286 $ 35,520
--------- ----------
--------- ----------
Earnings per share
Cdn. GAAP - basic $ 0.26 $ 0.20
Cdn. GAAP - fully diluted $ 0.26 $ 0.20
U.S. GAAP - basic - US$ $ 0.18 $ 0.14
U.S. GAAP - diluted - US$ $ 0.18 $ 0.14
Weighted average number of shares
Basic - Cdn. GAAP and U.S. GAAP 180,399 176,105
Fully diluted - Cdn. GAAP 180,399 176,105
Diluted - U.S. GAAP 182,500 178,419
Newbridge Networks Corporation
Condensed Consolidated Balance Sheets (unaudited)
(Canadian dollars in thousands)
August 1, May 2,
1999 1999
Cash and marketable securities $ 630,742 $ 879,694
Accounts receivable 560,204 472,811
Inventory 271,373 210,286
Property, plant and equipment 463,242 455,483
Goodwill 38,939 40,022
Other assets 557,834 412,328
----------- -----------
$2,522,334 $2,470,624
----------- -----------
----------- -----------
Accounts payable and accruals $ 365,955 $ 391,991
Income taxes 85,488 16,853
Long term obligations 392,620 386,890
Future tax obligations 54,277 123,088
Non-controlling interest 24,348 22,583
----------- -----------
922,688 941,405
Shareholders' equity 1,599,646 1,529,219
----------- -----------
$2,522,334 $2,470,624
Supplementary Condensed and Consolidated
Statements of Earnings (unaudited)(x)
(Canadian dollars in thousands, except per share data)
Fiscal quarters ended
-------------------------
August 1, August 2,
1999 1998
---------- ------------
Sales $495,070 $426,056
Cost of Sales 215,521 176,562
----------- -----------
Gross Margin 279,549 249,494
Expenses
Selling, general
and administrative 141,037 129,039
Research and development 67,621 67,156
Income from operations 70,891 53,299
Other expense (1,332) (1,598)
----------- -----------
Earnings before income taxes
and non-controlling interest 69,559 51,701
Provision for income taxes 20,520 14,978
Non-controlling interest 1,335 276
Net earnings $ 47,704 $ 36,447
----------- -----------
----------- -----------
Earnings per share
Cdn. GAAP - basic $ 0.26 $ 0.20
Cdn. GAAP - fully diluted $ 0.26 $ 0.20
U.S. GAAP - basic - US$ $ 0.18 $ 0.14
U.S. GAAP - diluted - US$ $ 0.18 $ 0.14
(x)Supplementary earnings exclude the impact of net gain on
investments, amortization of acquired intangibles, and non-recurring
gains and charges.
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