Paradyne Reports First Quarter 2003 Results; Exceeds Pro Forma Earnings Expectations.Business Editors/High-Tech Writers LARGO Largo, town (1990 pop. 65,674), Pinellas co., W Fla., on the Pinellas peninsula and the Gulf Coast, across the bay from Tampa; settled 1853, inc. 1905. It is a packing, canning, and shipping center in a citrus fruit and fishing area. , Fla.--(BUSINESS WIRE)--April 22, 2003 Paradyne Networks, Inc. (Nasdaq:PDYN), a leading provider of 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). voice, data and video network access solutions, today reported its first quarter 2003 financial results. Paradyne's pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the first quarter of 2003 was ($3.8 million) or ($0.09) per 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. share, beating the First Call consensus estimates of a pro forma net loss of ($0.12) per diluted share. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss reported for the first quarter of 2003 was ($3.5 million) or ($0.08) per diluted share. The differences between pro forma and GAAP results were the elimination of positive margin generated from the reversal of inventory reserves relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the sale of previously reserved inventory of ($.7 million) and exclusion of amortization of deferred stock compensation and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. of $.4 million. Total revenues for the first quarter were $19.3 million with broadband revenues representing the major portion of total revenues at $15.3 million or 79 percent. Narrowband In communications, transmission rates up to T1 speeds (1.544 Mbps). The upper limit is moving target. At one time, narrowband meant 150 bps (that is 150 bits per second!). Then, the upper limit became 2,400 bps. Later, it moved to 64 Kbps. Contrast with wideband and broadband. revenues were $2.4 million, and service and royalties accounted for the remaining $1.6 million. Paradyne's cash position remained strong at $46.5 million at the end of the first quarter. Highlights for the first quarter include: -- Paradyne shipped approximately 14,500 ReachDSL(TM) endpoints - up 36% from Q4 - and over 14,500 ReachDSL DSLAM (DSL Access Multiplexor) A central office (CO) device for ADSL service that intermixes voice traffic and DSL traffic onto a customer's DSL line. It also separates incoming phone and data signals and directs them onto the appropriate carrier's network. See DSL. ports, more than doubling its ports shipped in Q4, bringing the total to over 373,000 ReachDSL endpoints and over 420,000 ReachDSL CO ports shipped worldwide. -- Paradyne shipped over 9,000 ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line ports in Q1, up from approximately 6,000 in Q4. This increase is a reflection of the success of Paradyne's new product strategy. -- Paradyne shipped over 780 DSLAM's in the quarter, bringing the total number of DSLAM's in the marketplace to over 32,200 representing over 4.9 million ports of capacity in the field. -- Paradyne introduced the 6381 ADSL/R(TM) endpoint. The 6381 is the industry's first dual-mode 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 endpoint capable of supporting either standards-based ADSL or Paradyne's ReachDSL. This modem works with existing ADSL and ReachDSL DSLAM deployments, and offers service providers a significant reduction in inventory, installation, and provisioning costs, while improving time to market and end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. satisfaction. -- Paradyne opened a new office in Sao Paulo Paulo is the Portuguese form of the given name Paul:
Paulo office is the latest addition to the expansion into emerging markets. -- Paradyne exhibited at TELEXPO 2003, an industry tradeshow in Sao Paulo, during March. Paradyne showcased its BitStorm(TM) and GranDSLAM
Grandslam is a fictional character from the various Transformers universes. Transformers: Generation 1 He is an Autobot and part of the mini-cassette team. (R) product portfolios through video and high-speed Internet See broadband. Access solutions demonstrations. The GranDSLAM 4200 was demonstrated delivering streaming video A one-way video transmission over a data network. It is widely used on the Web as well as company networks to play video clips and video broadcasts. Computers in home networks stream video to digital media hubs connected to a home theater. over barbed wire barbed wire, wire composed of two zinc-coated steel strands twisted together and having barbs spaced regularly along them. The need for barbed wire arose in the 19th cent. . First Quarter Results Conference Call and Webcast As previously announced, Paradyne will host a conference call on Tuesday Tuesday: see week. , April 22, 2003 at 5:00 p.m. (ET) to discuss first quarter 2003 results and its outlook for the second quarter of 2003. The call will be broadcast live 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 for investors and the general public. This listen-only Webcast can be accessed at http://www.shareholder.com/paradyne/medialist.cfm - Windows Media Player Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. or Real Player is required to listen to this Webcast. Participants should go to the Web site at least ten minutes before this event to 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. The conference call can also be accessed by dialing 1-706-634-6062. About Paradyne Paradyne is a leading developer of carrier-class, 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. network access solutions for broadband voice, data and video. A recognized market leader in digital subscriber line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL), service level management (SLM See service level management system and spatial light modulator. ), and Broadband Voice and Media Gateway solutions, Paradyne markets its award-winning GranDSLAM and BitStorm DSL systems, ReachDSL and EtherLoop(R) products, Jetstream(R) Media Gateway systems and FrameSaver(R) Service Level Management systems to service providers and business customers worldwide. More information may be obtained by visiting http://www.paradyne.com or by calling +1-727-530-8623. Information about 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. : This press release contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements are made pursuant to the "safe-harbor" provisions of the 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 and are made based on management's current expectations and beliefs as well as on assumptions made by, and information currently available to, management. Among the factors that could cause actual future events to differ materially include: the uncertainty regarding the acceptance of new telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. based on DSL technology; reduction or discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of purchase of our products by NSPs; the failure of NSPs to incorporate our products into their infrastructure; the possibility that Paradyne's competitors may develop competing products that are superior in terms of quality, cost or both. For a detailed discussion of other risk factors that could affect Paradyne's business, please refer to the risks identified in Paradyne's Current Report on Form 10-K/A, dated March 24, 2003, and in Paradyne's other filings with the Securities and Exchange Commission. Editor's Note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : BitStorm and ReachDSL are trademarks of Paradyne Corporation. EtherLoop, FrameSaver, GranDSLAM, Jetstream, Paradyne, and the Paradyne logo are registered trademarks of Paradyne Corporation. All other service marks and trademarks are the property of their respective owners.
Paradyne Networks, Inc.
Condensed Unaudited Consolidated Statements of Operations
(Thousands except per share amounts)
Three months Ended
March 31,
-----------------
2003 2002
-------- --------
Revenues:
Sales $17,734 $37,023
Services 1,564 1,029
Royalties - 506
-------- --------
Total Revenues 19,298 38,558
Total cost of sales 9,565 21,369
-------- --------
Gross Margin 9,733 17,189
Operating expenses:
Research and development (includes $2,830
of purchased R&D in March 2002) 5,609 8,144
Selling, general & administrative 7,250 7,872
Amortization of deferred stock compensation
and intangible asset 423 187
Business restructuring charges - 1,011
-------- --------
Total operating expenses 13,282 17,214
-------- --------
Operating Income (Loss) (3,549) (25)
Other (income) expenses:
Interest, net (154) (150)
Other, net 93 61
-------- --------
Income (loss) before provision for income tax (3,488) 64
Provision (benefit) for income tax - (859)
-------- --------
Net income (loss) ($3,488) $923
======== ========
Average shares outstanding
Basic 42,862 36,159
Diluted 42,862 39,696
Earnings per common share
Basic (0.08) 0.03
Diluted (0.08) 0.02
Pro forma diluted net income (loss) per share (A) ($0.09) $0.10
Paradyne Networks, Inc.
Footnote To Condensed Consolidated Statements of Operations
(Thousands except per share amounts)
(Unaudited)
(A) Reconciliation of Earnings Following Generally Accepted
Accounting Principles (GAAP) With Non-GAAP Financial Measures
(Pro Forma Earnings)
Paradyne supplements its earnings releases provided in accordance
with generally accepted accounting principles, with non-GAAP financial
measures that exclude those transactions that management does not
reasonably expect to be part of recurring business transactions over
the long term. Paradyne's management believes the pro forma
information provides investors useful information to understand
operating results and make comparisons with prior periods. Paradyne's
management uses such pro forma measures internally, to evaluate the
company's net income and operating performance on a period-over-period
basis, and for planning and forecasting future periods.
Pro forma diluted net income (loss) per share calculations exclude the
elimination of positive margin generated from the reversal of
inventory reserves on previously reserved inventory sold during the
quarter, the financial statement impact of the writeoff of purchased
research and development related to the acquisition of Elastic
Networks Inc., the amortization of deferred stock compensation and
intangible assets, business restructuring charges and tax benefit from
the Job Creation and Worker Assistance Act of 2002.
Three months Ended
March 31,
------------------
2003 2002
--------- --------
Net income (loss) in accordance with GAAP ($3,488) $923
Increase (decrease) to net income (loss):
Elimination of positive margin generated from the reversal
of inventory reserves on previously reserved inventory
sold during the quarter (743) -
Exclusion of writeoff of purchased research
and development 2,830
Exclusion of amortization of
deferred stock compensation & intangible assets 423 187
Exclusion of business restructuring charges - 1,011
Exclusion of tax benefit - (859)
-------- -------
Adjustment to net income (loss) (320) 3,169
Pro Forma net income (loss) $(3,808) $4,092
======== =======
Paradyne Networks, Inc.
Condensed Unaudited Consolidated Balance Sheets
(In Thousands)
March December
31, 31,
ASSETS 2003 2002
-------- --------
CURRENT ASSETS:
Cash and cash equivalents $46,540 $47,706
Accounts receivables, net 9,033 13,072
Inventories, net 15,997 16,661
Prepaid & other current assets 1,854 2,896
-------- --------
Total current assets 73,424 80,335
Property plant & equipment, net 9,039 10,396
Other assets 6,198 6,525
-------- --------
Total assets $88,661 $97,256
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $4,425 $6,333
Current portion of debt 230 396
Payroll & benefit related liabilities 2,195 3,445
Other current liabilities 7,020 9,087
-------- --------
Total current liabilities 13,870 19,261
-------- --------
Total liabilities 13,870 19,261
Stockholders' equity 74,791 77,995
-------- --------
Total liabilities and stockholders' equity $88,661 $97,256
======== ========
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