PairGain Reports 60 Percent Rise in Second Quarter Earnings on Sales Increase of 40 Percent.TUSTIN Tustin (tŭs`tĭn), residential city (1990 pop. 50,689), Orange co., S Calif., part of the greater Los Angeles area; founded 1868, inc. 1927. Plastics, furniture, computers, and electronic equipment are manufactured. , Calif.--(BUSINESS WIRE)--July 9, 1997--PairGain Technologies Inc. (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 :PAIR) Wednesday reported that revenues for the second quarter ended June 30, 1997 rose to $66.4 million from $47.2 million for the quarter ended June 30, 1996. Net income for the quarter was $11.7 million, or 16 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with $7.3 million, or 10 cents per share, in the second quarter of 1996. Revenues for the six months ended June 30, 1997 rose to $137.1 million, or 56 percent above the same period in 1996. Net income for the first half of 1997 was $23.1 million, or 31 cents per share, compared with $13.5 million, or 19 cents per share, in the first six months of 1996. Net income for the first half of 1997 excluding $2.6 million of merger expenses related to PairGain's February 1997 acquisition of Avidia Systems was $25.7 million, or 34 cents per share. Successful introduction of the ETSI (European Telecommunications Standards Institute, Sophia Antipolis technical park, Nice, France, www.etsi.org) A non-profit membership organization founded in 1988, dedicated to standardizing information and communication technologies (ICT) throughout Europe. product line enabled international sales to increase by 223 percent in Q2 1997 over the second quarter of 1996. Over 11 percent of the current quarter's revenues and 9 percent of the revenues for the first six months of 1997 were generated by sales outside of 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. . Gross margins remained strong at 49 percent for the second quarter, unchanged from the first quarter of 1997 and up from 48 percent in the second quarter of 1996. For the six month period ending June 30, gross margins were 49 percent in 1997 and 48 percent in 1996. 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. were 24 percent of sales for the second quarters of both 1997 and 1996. Second quarter operating expenses grew as a percentage of sales to 24 percent from 19 percent (excluding merger expenses) in Q1 1997, as engineering resources continued to be added to support the development and introduction of new subscriber carrier and megabit One million bits. Also Mb, Mbit and M-bit. See mega and space/time. access products. Operating expenses, excluding merger expenses, were 21 percent of sales for the six month period ending June 30, 1997, compared with 24 percent in the first half of 1996. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. grew by 51 percent to $16.8 million in the second quarter of 1997, and by 75 percent to $35.8 million for the six month period ending June 30, 1997 over the corresponding periods in 1996. Excluding merger expenses, operating income in the first half of 1997 was $38.4 million, an 87 percent increase over the first half of 1996. PairGain generated $23.4 million in cash in Q2 1997, ending the quarter with $155.1 million in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying decreased to $30.1 million at June 30, 1997, from $35.1 million at March 31, 1997. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). decreased to 41 in the second quarter of 1997 from 45 in the first quarter. Inventories at the end of the second quarter of 1997 remained constant with March 31, 1997, at $23.3 million, and well below the Dec. 31, 1996, balance of $26.1 million. PairGain designs, manufactures and markets systems which allow telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. carriers and organizations with private communications networks The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. to more efficiently and quickly deploy high-speed digital services to end users over the large existing infrastructure of unconditioned unconditioned /un·con·di·tion·ed/ (un?kon-dish´und) not a result of conditioning; unlearned; occurring naturally or spontaneously. copper wires. PairGain's HiGain and Campus systems are marketed under the trademark CopperOptics, indicating their ability to provide fiber quality transmission over the "last mile" in both public and private telephone networks. PairGain information is available on 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 at http://www.pairgain.com . -0- Except for the historical information contained herein, the matters discussed in the announcement are 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. which involve risk and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting the company's operations, markets, products, services and prices and other factors discussed in the company's filings with the Securities and Exchange Commission.
PairGain Technologies
Condensed Consolidated Income Statements
(Unaudited)
(In thousands, except per share data)
Quarter Ended Six Months Ended
6/30/97 6/30/96 6/30/97 6/30/96
(Restated) (Restated)
Revenues $ 66,369 $ 47,241 $137,118 $ 87,752
Cost of goods sold 33,583 24,574 69,363 46,046
Gross margin 32,786 22,667 67,755 41,706
Research & development 7,535 4,663 13,693 8,311
Selling & marketing 5,941 4,363 10,741 8,087
General & administrative 2,469 2,472 4,902 4,807
Merger expenses --- --- 2,642 ---
Total operating expenses 15,945 11,498 31,978 21,205
Operating income 16,841 11,169 35,777 20,501
Interest and other
income, net 1,586 894 2,835 1,659
Income before
income taxes 18,427 12,063 38,612 22,160
Provision for
income taxes 6,707 4,739 15,518 8,614
Net income $ 11,720 $ 7,324 $ 23,094 $ 13,546
Earnings per share $ 0.16 $ 0.10 $ 0.31 $ 0.19
Average shares
outstanding 74,736 73,552 75,138 72,662
-0-
PairGain Technologies Inc.
Condensed Consolidated Balance Sheets
(in thousands)
6/30/97 12/31/96
(Unaudited)
Assets
Cash and cash equivalents $ 90,854 $ 48,416
Short-term investments 64,197 65,779
Accounts receivable, net 30,084 23,888
Inventory, net 23,324 26,149
Other current assets 14,405 13,857
Total current assets 222,864 178,089
Total long-term assets 21,417 16,915
Total assets $244,281 $195,004
Liabilities & Stockholders' Equity
Accounts payable and accruals $ 44,344 $ 37,408
Bank line of credit --- ---
Total current liabilities 44,344 37,408
Total long-term liabilities --- ---
Total stockholders' equity 199,937 157,596
Total liabilities and stockholders'
equity $244,281 $195,004
CONTACT: PairGain Technologies, Tustin Charles W. McBrayer, 714/730-2969 Kim Gower, 714/730-2330 |
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