Occam Networks Posts Fourth Consecutive Quarter of Record Revenues and Double-Digit New Customer Growth.SANTA BARBARA Santa Barbara (săn'tə bär`brə, –bərə), city (1990 pop. 85,571), seat of Santa Barbara co., S Calif., on the Pacific Ocean; inc. 1850. , Calif. -- Company Adds 100th Customer and Enhances Product Line During Quarter Occam(R) Networks Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : OCCM OCCM Ocean Carbon Cycle Model OCCM On Condition Cyclic Maintenance OCCM Office of Commercial Communications Management OCCM Optimistic Concurrency Control Mechanism ), a supplier of innovative Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer and IP-based loop carrier equipment to 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. worldwide, today announced results for the second quarter of 2005, which ended June June: see month. 30, 2005. The company reported revenue for the quarter of $8.7 million, setting a new company record for the fourth consecutive quarter. Second-quarter 2005 revenues represented an increase of 26 percent over the $6.9 million reported for the first quarter of 2005, and a 174 percent increase over the $3.2 million reported for second quarter of 2004. The company also added more than a dozen new customers for the fourth consecutive quarter, bringing the company's total number of customers to 100. "The second quarter was another solid quarter for Occam -- we added our 100th customer, grew revenues, announced several significant new products, and increased the awareness and visibility of Occam in our target markets," said Bob Howard-Anderson, 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. of Occam Networks. "Our continued success demonstrates the growing acceptance by Telcos that Ethernet and IP are superior technologies for building simple, cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. access networks for delivering new services, especially Triple Play." Occam gained more than a dozen new customers during the second quarter of 2005, including Farmers Telephone Cooperative Inc. (FTC FTC See Federal Trade Commission (FTC). ), the nation's third largest telephone cooperative. Farmers selected the Occam BLC BLC Boston Library Consortium BLC Bethany Lutheran College (Minnesota) BLC Back Light Compensation (video cameras) BLC Belo Corporation (stock symbol) BLC Broadband Loop Carrier 6000(TM) System to build the 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 that will deliver Triple Play services, voice, video, and high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data, to its 60,000 subscribers in eastern South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. . During the quarter, the company enhanced the capabilities of its flagship BLC 6000 System with the announcement of fiber to the home functionality, and the delivery of an Emergency Stand Alone (ESA 1. (architecture) ESA - Enterprise Systems Architecture. 2. (body) ESA - European Space Agency. ) feature, as well as other upgrades to the BLC 6000's system. The company's BLC 6312 Optical Line Termination An optical line termination (OLT), also called an optical line terminal, is the service provider endpoint of a passive optical network and is placed at the central office or head end in systems such as Verizon's FIOS network. (OLT) blade and ON 2240 Optical Network Terminal (ONT ONT Ontario (old acronym - ON is now frequently used) ONT Optimizing Converged Cisco Networks (cisco CCNP exam) ONT Optical Network Terminal ONT Ontario Northland Railway ) are targeted to be the industry's first products to deliver up to one gigabit per second of bandwidth to the subscriber premise, providing a cost-effective alternative, with much higher subscriber bandwidth, than passive optical networks (PON (Passive Optical Network) An optical point-to-multipoint access network. There are no optical repeaters or other active devices in a PON, hence the name "passive. ). With the addition of the ESA feature, the BLC 6000 System became the first broadband loop carrier to provide emergency services emergency services Emergency care '…services …necessary to prevent death or serious impairment of health and, because of the danger to life or health, require the use of the most accessible hospital available and equipped to furnish those services' calling and local station-to-station sta·tion-to-sta·tion adj. Of, relating to, or designating a long-distance telephone call in which the caller is charged upon reaching anyone at the receiving number. adv. By station-to-station long-distance telephone. calling during network or equipment failures, enabling Telcos to deploy Ethernet and IP technologies and continue to meet FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. requirements to provide lifeline life·line n. 1. a. An anchored line thrown as a support to someone falling or drowning. b. A line shot to a ship in distress. c. A line used to raise and lower deep-sea divers. 2. POTS. Additionally the company upgraded the BLC 6000 System to include support for several new ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line 2Plus features including copper pair bonding, for maximizing ADSL speeds over copper telephone lines, symmetrical symmetrical equally on both sides. symmetrical multifocal encephalopathy inherited disease in two forms: Limousin form appears at about a month old with blindness, forelimb hypermetria, hyperesthesia, nystagmus, aggression, weight 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 services for business customers, long-reach DSL for customers beyond 18,000 feet, and Seamless Rate Adaptation (SRA SrA abbr. senior airman ), as well as other new features. The upgrade provides Telcos with the first commercially available standards-based implementation of ADSL2Plus bonding, Reach Extended and Symmetrical Services. Company gross margins for the quarter were lower as a percent of revenue for three reasons: 1) The completion and revenue recognition of a large Rural Utilities Service contract that shipped in 2004, prior to recent improvements made in product costs, had much lower margins than shipments made during Q2; 2) Lower Operations overhead absorption due to the continued decrease in inventory levels; and 3) A downward revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of inventory on hand from prior quarters to adjust for the lower cost of product received in Q2. "We are pleased that we continued our trend of decreasing product costs and inventory levels in the quarter, even though it negatively affected Gross Margins in closing Q2," said Howard-Anderson. "In addition to lowered product costs and inventories, additional capital raised in the quarter left us with an overall healthier balance sheet." Occam Conference Call Scheduled to Report Q2 2005 Financial Results Starting at 1:30 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT on Tuesday, Aug. 9, 2005, Occam Networks will conduct a conference call to report the results for Q2 2005. The call, which will be open to the public, can be accessed by dialing 800-351-6801 (for U.S. callers). The passcode required for participation is 78490 and the call leader is Howard Bailey. Callers will be put on "music hold" until Howard-Anderson, president and CEO, and Bailey, CFO See Chief Financial Officer. of Occam Networks, join the call. The first portion of the call will include a presentation of financial information for Q2 2005. Bailey will then open the call to listeners for a question and answer period. For those unable to listen at the designated time, a recording of the call will be made available on the Occam Networks Web site (www.occamnetworks.com) for 72 hours after the call is completed.
OCCAM NETWORKS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
June 30, Dec. 31,
2005 2004
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 11,734 $ 4,432
Restricted cash 2,101 2,101
Accounts receivable, net 3,717 5,217
Inventories 4,575 6,611
Prepaid and other current assets 1,304 794
------------ ------------
Total current assets 23,431 19,155
Property and equipment, net 1,731 1,692
Other assets 208 213
------------ ------------
Total assets $ 25,370 $ 21,060
============ ============
LIABILITIES, REDEEMABLE PREFERRED STOCK
AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,521 $ 6,277
Accrued expenses 4,062 3,330
Deferred revenues 192 --
Current portion of long-term debt
and capital lease obligations 1,282 863
------------ ------------
Total current liabilities 7,057 10,470
Long-term debt and capital lease
obligations 1,777 2,987
------------ ------------
Total liabilities 8,834 13,457
Redeemable preferred stock
Series A-2 convertible preferred
stock, $.001 par value, authorized
4,300 shares, 3,560 and 2,224 issued
and outstanding at June 30, 2005, and
at Dec. 31, 2004, respectively,
liquidation preference of $106,800
and $66,723 at June 30, 2005, and
Dec. 31, 2004, respectively 34,869 20,993
Series A-2 convertible preferred stock
warrant 73 503
Stockholders' deficit:
Common stock, $0.001 par value,
750,000 shares authorized; 270,199
and 268,570 shares issued and
outstanding at June 30, 2005, and
Dec. 31, 2004, respectively 270 269
Additional paid-in capital 87,355 87,294
Warrants 559 559
Deferred stock compensation (295) (633)
Accumulated deficit (106,296) (101,382)
------------ ------------
Total stockholders' deficit (18,406) (13,893)
------------ ------------
Total liabilities, redeemable preferred
stock and stockholders' deficit $ 25,370 $ 21,060
============ ============
OCCAM NETWORKS INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Three months ended
------------------------------
June 30, March 31, June 30,
2005 2005 2004
-------- -------- --------
Sales $ 8,740 $ 6,921 $ 3,185
Cost of sales 6,771 5,117 4,165
-------- -------- --------
Gross profit (loss) 1,969 1,804 (980)
Operating expenses:
Research and product development 1,597 1,569 1,750
Sales and marketing 1,991 1,606 1,819
General and administrative 698 728 572
-------- -------- --------
Total operating expenses 4,286 3,903 4,141
Loss from operations (2,317) (2,099) (5,121)
Interest expense, net (56) (112) (26)
-------- -------- --------
Non-GAAP Loss before income taxes (2,373) (2,211) (5,147)
Provision for income tax -- -- --
-------- -------- --------
Non-GAAP net loss $(2,373) $(2,211) $(5,147)
Reconciliation of non-GAAP net loss
to GAAP net loss attributable to
common stockholders:
Non-GAAP net loss $(2,373) $(2,211) $(5,147)
Non-GAAP exclusions:
Deferred stock-based compensation 162 167 223
Beneficial conversion feature on
Series A-2 preferred stock and
warrants 35 1,787 557
-------- -------- --------
GAAP net loss attributable to common
stockholders $(2,570) $(4,165) $(5,927)
======== ======== ========
OCCAM NETWORKS INC.
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Three months ended
--------------------------------
June 30, March 31, June 30,
2005 2005 2004
--------- --------- --------
Sales $ 8,740 $ 6,921 $ 3,185
Cost of sales 6,771 5,117 4,165
--------- --------- --------
Gross profit (loss) 1,969 1,804 (980)
Operating expenses (1):
Research and product development 1,736 1,712 1,928
Sales and marketing 2,012 1,628 1,854
General and administrative 700 730 582
--------- --------- --------
Total operating expenses 4,448 4,070 4,364
Loss from operations (2,479) (2,266) (5,344)
Interest expense, net (56) (112) (26)
--------- --------- --------
Loss before income taxes (2,535) (2,378) (5,370)
Provision for income tax -- -- --
--------- --------- --------
Net loss (2,535) (2,378) (5,370)
Beneficial conversion feature (35) (1,787) (557)
--------- --------- --------
Net loss attributable to common
stockholders $(2,570) $(4,165) $(5,927)
========= ========= ========
(1) Amortization of stock-based
compensation included in:
Research and product development $139 $143 $178
Sales and marketing 21 22 35
General and administrative 2 2 10
--------- --------- --------
Total amortization of stock-based
compensation $ 162 $ 167 $ 223
========= ========= ========
Non-GAAP Disclosure Certain non-GAAP financial measures are included in this press release. Our GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results have been adjusted to exclude stock-based compensation charges associated with the issuance of stock options prior to the company's merger in May 2002. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance and our prospects for the future. Specifically, we believe non-GAAP measures can provide useful information to both management and investors by excluding certain non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) that are not indicative of our core operating results. Further, these non-GAAP financial measures are one of the primary indicators management uses for planning and forecasting future periods. In addition, since we have historically reported non-GAAP measures to the investment community, we believe the inclusion of non-GAAP measures provides consistency in our financial reporting. The presentation of this additional information is not meant to be considered a substitute for financial measures prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with 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 . A reconciliation of GAAP to non-GAAP net loss is included above. Cautionary Note Concerning 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. Portions of this press release contain forward-looking statements regarding future events, Occam's future financial performance, and the performance of Occam's products. In particular, the press release contains forward-looking statements about trends in our revenue and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , and statements concerning product improvements and product performance issues. These statements involve numerous risks and uncertainties, which could cause actual results or events to differ materially from any future results or events suggested in these forward-looking statements. These risks include, among others, the risk that our revenues will not increase as anticipated if our BLC 6000 product does not achieve market acceptance and that any continuing product performance problems would have an adverse effect on our business, margins and operating results. Additional risks associated with our business include general market conditions affecting the decisions of communications service providers A Communications Service Provider or CSP is a company that transports information electronically. The term encompasses public and private companies in the wireline, wireless, Internet, cable, satellite, and managed services businesses. to purchase Occam's equipment, changes in service providers' business models, the rate our customers deploy their networks, our customers' ability to secure financing, the timing of order and shipments of products, mix of products sold, changes in the prices of components, Occam's ability to maintain production volumes and secure key components, and Occam's ability to develop new products. Please refer to Occam's most recent quarterly report on Form 10-Q Form 10-Q See 10-Q. , 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. and other filings Occam makes with the SEC for additional factors that could cause actual results to differ materially from those contained in any forward-looking statements provided today. About Occam Networks Inc. Occam Networks Inc. develops and markets innovative Broadband Loop Carrier networking equipment that enable telephone companies to deliver voice, data and video services. Based on Ethernet and Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP) technologies, Occam's equipment allows telecommunications service providers to profitably deliver traditional phone services, as well as advanced voice-over-IP, residential and business broadband, and digital television services through a single, all-packet access network. Occam is headquartered in Santa Barbara, Calif. Additional information can be found at www.occamnetworks.com. Portions of this press release may contain forward-looking statements regarding future events or the future performance of Occam Networks. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from any future performance suggested in such statements. Rapidly changing technologies and market conditions may require changes to Occam's products. Occam does not undertake any obligation to publicly update any forward-looking statements as a result of new information, future events or otherwise. Please also refer to the company's most recent quarterly report on Form 10-Q, annual report on Form 10-K and other filings with the SEC. These filings contain and identify other important factors that could cause actual results to differ materially from those contained in any forward-looking statements. Occam and Occam BLC 6000 are either registered trademarks or trademarks of Occam Networks Inc. 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/or other countries. All other trademarks mentioned are the property of their respective owners. |
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