FREMONT, CA , today reported its results for the third quarter
of fiscal 2008.
Total revenue in the third quarter was $29.0 million, an
increase of 6% from the prior quarter and a 32% increase over the
third quarter of the prior fiscal year. This represents NET's
seventh consecutive quarter of revenue growth. Revenue for the
third quarter of fiscal 2008 included $1.1 million recognized by
Quintum Technologies following the completion of the acquisition by
NET on December 4, 2007.
Product revenue was $25.5 million, a 6% increase from the prior
quarter and a 31% increase from the third quarter last year.
Increased sales of the company's VX Series and NX Series products
were again the primary driver of revenue growth from the prior
year.
Net income for the quarter was $1.5 million, or $0.05 per share,
compared to net income of $1.6 million, or $0.06 per share, in the
prior quarter and a net loss of $599,000, or $0.02 per share, in
the third quarter of the prior fiscal year. Net income in the third
quarter of fiscal 2008 was affected by approximately $1.0 million
of transition costs and inventory charges related to our move to a
new contract manufacturer. The company expects these costs to begin
to reduce slightly in the current quarter and to decrease
significantly over the first half of fiscal 2009.
Cash and investment balances at the end of the quarter were
$161.2 million, compared to $97.0 million at the end of the prior
quarter. During the third quarter of fiscal 2008, the company
obtained net proceeds of $82.2 million from an $85 million
convertible senior debt offering, used approximately $24 million of
cash in the acquisition of Quintum, and added to the company's cash
and investments with more than $6 million from operations.
Total revenue for the nine month period ended December 28, 2007
was $82.7 million compared to $59.1 million for the same period of
the prior year. Net income for the nine month period ended December
28, 2007 was $4.4 million, or $0.16 per share, compared to a net
loss of $6.7 million, or $0.27 per share, for the same period of
the prior year.
Non-GAAP net income for the quarter was $2.6 million, or $0.09,
per share, compared with non-GAAP net income of $2.5 million, or
$0.09 per share, in the prior quarter and non-GAAP net loss of
$292,000, or $0.01 per share, in the third quarter of fiscal 2007.
For the third quarter of fiscal 2008, non-GAAP net income was
calculated by excluding $769,000 of non-cash stock-based
compensation expense, approximately $200,000 for amortization of
intangible assets from our acquisition of Quintum and $69,000 of
accretion charges resulting from vacating our former manufacturing
facility in the fourth quarter of fiscal 2007. For the nine month
period ended December 28, 2007 non-GAAP net income was calculated
by excluding $2.1 million of non-cash stock-based compensation
expense, $257,000 of accretion and other charges resulting from
vacating our former manufacturing facility and approximately
$200,000 for amortization of intangible assets from our acquisition
of Quintum. For the third quarter of fiscal 2007, non-GAAP net loss
was calculated by excluding $306,000 of non-cash stock-based
compensation expense. Refer to the table below for a reconciliation
of GAAP to non-GAAP for net income and earnings per share.
President and CEO C. Nicholas Keating, Jr. remarked, "During the
third quarter, we moved forward on our plans to grow the company
through internal product development, acquisition and partnerships.
We also took steps to position the company for future growth by
strengthening our cash position, expanding our international
footprint and gaining necessary third party product certifications.
I am encouraged by the acceptance of our products from
international and federal government customers and the expanding
opportunity emerging for us in the enterprise market for unified
communications. Further, with the addition of Quintum Technologies
and our own product development, we are able to offer a broad
product line to our customers.
"Operationally during the quarter, we undertook a number of key
initiatives including the launch of a new ERP system, the
transition to a new contract manufacturer and the securing of an
extension of our existing General Services Administration Schedule
contract. Finally, the $85 million convertible senior debt offering
we completed in late December augments our solid balance sheet, and
will also enable us to take advantage of strategic opportunities as
they arise," added Keating.
Conference Call Information:
The company will be hosting a conference call today to discuss
these results at 5:30 p.m. ET. Please dial (800) 901-5217 or (617)
786-2964 and provide conference ID# 47184529 to access the call.
The conference call will also be broadcast from
http://ir.net.com.
A recording of the conference call will be provided by telephone
and the internet beginning two hours after completion of the call.
The replay may be accessed by telephone through midnight on
February 7, 2008; please dial (888) 286-8010 or (617) 801-6888 and
enter conference ID# 34353298. A digital recording will be
available on the company's website for one year.
About Network Equipment Technologies, Inc.
For nearly a quarter of a century, Network Equipment
Technologies, Inc. (NET) has provided voice and data communications
equipment for multi-service networks requiring high degrees of
versatility, interoperability, security and performance. NET's
broad family of products are purpose-built for mixed-service,
multi-protocol networks; bandwidth-sensitive site communications;
high performance, security-sensitive transmissions; and converged
communications. The company's NX (network exchange) and VX (voice
exchange) products enable interoperability and integration with
existing networks for seamless migration to secure IP-based voice
and data communications. In addition, Quintum, a subsidiary of NET,
delivers VoIP access solutions that bring the reliability and voice
clarity of public telephone networks to Internet telephony.
Visit www.net.com for more information.
Use of Non-GAAP Financial Information
To supplement the company's condensed consolidated financial
statements presented in accordance with GAAP, NET has provided
certain non-GAAP net income (loss) financial measures that exclude
amortization of intangible assets from the Quintum acquisition,
expenses for the company's non-cash stock compensation, and charges
relating to vacating our former manufacturing facility. These
non-GAAP measures include net income (loss) and net income (loss)
per share data that are adjusted from results based on GAAP to
exclude certain expenses, gains and losses. These non-GAAP measures
are provided to enhance investors' overall understanding of the
company's current financial performance and the company's prospects
for the future. NET believes the non-GAAP measures provide useful
information to both management and investors by excluding certain
expenses that may not be indicative of its core operating results
and reflect NET's ongoing business in a manner that allows
meaningful period-to-period comparisons. These measures should be
considered in addition to results prepared in accordance with GAAP,
but should not be considered a substitute for, or superior to, GAAP
results. The non-GAAP measures included in this press release have
been reconciled to the GAAP results in the attached tables.
Forward-Looking Statements
This press release contains forward-looking statements, within
the meaning of the safe harbor provisions of Section 21E of the
Securities Exchange Act of 1934, relating to our results of
operations. Investors are cautioned that such statements are based
on current expectations, forecasts and assumptions that involve
risks and uncertainty that may cause actual results to differ
materially from those expressed or implied in the forward-looking
statements. Factors that could affect such results include market
acceptance for our new products and our ability to commercialize
new products and product enhancements, timely completion of product
development initiatives, new competition and technological changes,
the challenges involved in integrating the operations of our newly
acquired Quintum subsidiary, effective completion of the transition
of contract manufacturing, the timing of orders and satisfaction of
conditions to recognize revenue, and unanticipated or extraordinary
expenses, as well as the factors identified in Network Equipment
Technologies' most recent Annual Report on Form 10-K and most
recent subsequent Quarterly Report on Form 10-Q. Network Equipment
Technologies disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
NETWORK EQUIPMENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Quarter Ended Nine Months Ended
--------------------- ---------------------
December December December December
28, 2007 29, 2006 28, 2007 29, 2006
---------- ---------- ---------- ----------
Revenue:
Product $ 25,480 $ 19,424 $ 72,424 $ 51,470
Service 3,559 2,645 10,288 7,593
Total revenue 29,039 22,069 82,712 59,063
---------- ---------- ---------- ----------
Costs of revenue:
Cost of product revenue 11,672 7,562 31,061 20,690
Cost of service revenue 3,052 2,429 8,933 7,223
---------- ---------- ---------- ----------
Total cost of revenue 14,724 9,991 39,994 27,913
---------- ---------- ---------- ----------
Gross margin 14,315 12,078 42,718 31,150
Operating expenses:
Sales and marketing 5,076 4,848 14,279 13,728
Research and development 5,783 5,044 17,751 15,747
General and administrative 2,774 3,286 8,300 9,555
Restructure and other costs 27 (5) 79 (4)
---------- ---------- ---------- ----------
Total operating expenses 13,660 13,173 40,409 39,026
---------- ---------- ---------- ----------
Income (loss) from
operations 655 (1,095) 2,309 (7,876)
Other income (expense), net 254 (16) 247 (86)
Interest income, net 676 511 2,043 1,258
---------- ---------- ---------- ----------
Income (loss) before
taxes 1,585 (600) 4,599 (6,704)
---------- ---------- ---------- ----------
Income tax provision (benefit) 47 (1) 206 5
---------- ---------- ---------- ----------
Net income (loss) $ 1,538 $ (599) $ 4,393 $ (6,709)
========== ========== ========== ==========
Per share amounts
Net income (loss):
Basic $ 0.06 $ (0.02) $ 0.16 $ (0.27)
========== ========== ========== ==========
Diluted $ 0.05 $ (0.02) $ 0.16 $ (0.27)
========== ========== ========== ==========
Common and common equivalent
shares:
Basic 27,779 24,978 26,939 24,886
========== ========== ========== ==========
Diluted 28,858 24,978 27,997 24,886
========== ========== ========== ==========
NETWORK EQUIPMENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December March
28, 2007 30, 2007
----------- -----------
Current assets:
Cash and investments $ 161,208 $ 90,132
Accounts receivable, net 20,375 14,822
Inventories 12,912 10,452
Prepaid expenses and other assets 7,545 3,242
----------- -----------
Total current assets 202,040 118,648
Property and equipment, net 10,102 10,581
Goodwill and purchased intangibles, net 42,360 --
Other assets 9,995 4,790
----------- -----------
Total assets $ 264,497 $ 134,019
=========== ===========
Liabilities and Stockholders' Equity
Accounts payable $ 12,065 $ 8,569
Other current liabilities 16,150 15,274
----------- -----------
Total current liabilities 28,215 23,843
Long-term liabilities 4,832 3,886
3 3/4% convertible senior notes 85,000 --
7 1/4% redeemable convertible subordinated
debentures 24,706 24,706
Stockholders' equity 121,744 81,584
----------- -----------
Total liabilities and stockholders' equity $ 264,497 $ 134,019
=========== ===========
NETWORK EQUIPMENT TECHNOLOGIES, INC.
GAAP TO NON-GAAP NET INCOME (LOSS) RECONCILIATION
(Unaudited - in thousands, except per share data)
Three Months Ended Nine Months Ended
--------------------- ---------------------
December December December December
28, 2007 29, 2006 28, 2007 29, 2006
---------- ---------- ---------- ----------
GAAP net income (loss) $ 1,538 $ (599) $ 4,393 $ (6,709)
Cost of product revenue,
stock based compensation
expense 51 22 120 68
Cost of service revenue,
stock based compensation
expense 37 9 97 27
Sales and marketing, stock
based compensation expense 189 60 471 182
Research and development,
stock based compensation
expense 136 67 315 210
General and administrative,
stock based compensation
expense 356 148 1,058 365
General and administrative,
accretion of discount on
future cash flows from
subleases 69 -- 226 --
Restructuring costs, costs
to vacate former
manufacturing facility -- -- 31 --
Amortization of intangibles
acquired through
acquisition 191 -- 191 --
Income tax effect (10) 1 (61) (1)
---------- ---------- ---------- ----------
Non-GAAP net income (loss) $ 2,557 $ (292)$ 6,841 $ (5,858)
========== ========== ========== ==========
Non-GAAP net income (loss)
per share data:
Basic $ 0.09 $ (0.01) $ 0.25 $ (0.24)
========== ========== ========== ==========
Diluted $ 0.09 $ (0.01) $ 0.24 $ (0.24)
========== ========== ========== ==========
Common and common equivalent
shares:
Basic 27,779 24,978 26,939 24,886
========== ========== ========== ==========
Diluted 28,858 24,978 27,997 24,886
========== ========== ========== ==========
Contact info: Leigh Salvo DirectIR, Inc. 510-647-8870 Email
Contact
Network Equip (NYSE:NWK)
Historical Stock Chart
From Jul 2024 to Jul 2024
Network Equip (NYSE:NWK)
Historical Stock Chart
From Jul 2023 to Jul 2024
