Carrier Access Reports Third-Quarter 2003 Financial Results
Press Release Source: Carrier Access Corporation
Tuesday October 21, 4:00 pm ET
Revenues Grow 31% Sequentially
Company Achieves Third Consecutive Quarterly Profit
BOULDER, Colo.--(BUSINESS WIRE)--Oct. 21, 2003--Carrier Access Corporation (Nasdaq: CACS - News), a leading provider of broadband access solutions, today reported its financial results for the third quarter ended September 30, 2003.
Revenues for the third quarter of fiscal 2003 were $15.9 million compared with $12.2 million for the second quarter of fiscal 2003 and $10.5 million for the third quarter of fiscal 2002. Net income for the third quarter of fiscal 2003 was $702,000 or $0.03 per diluted share compared with a net income for the second quarter of fiscal 2003 of $122,000 or $0.00 per diluted share and a net loss of $14.9 million or $0.60 per diluted share for the third quarter of fiscal 2002.
Revenues for the first nine months of fiscal 2003 were $39.3 million compared with $38.8 million in the same period last year. Net income for the first nine months of fiscal 2003 was $941,000 or $0.04 per diluted share compared with a net loss for the first nine months of fiscal 2002 of $44.6 million or $1.80 per diluted share. During the first nine months of 2003, the company recovered significant amounts of aged receivables, and accordingly changed its estimates for allowance for doubtful accounts.
"This was a great quarter for Carrier Access, our third consecutive quarter of revenue and net income growth," said Roger Koenig, president and CEO, Carrier Access Corporation. "We are clearly executing our plan to return to profitability and to increase our revenue through diversification of our customer base with the introduction of new products. Our third-quarter results demonstrate our progress as revenues grew 31% sequentially to $15.9 million, reflecting increased market demand for our wireless, integrated business services, Voice over IP (VoIP), and fiber solutions. Our investments in research and development over the last two years are now showing returns as we continue to deliver new applications to new customers. As a result, we believe we are gaining momentum and market share in our target access segments.
"The third quarter was particularly significant for us in the wireless market. We believe that our success is due to a continuing wireless carrier focus on cell site efficiency, improving remote management, upgrading sites for E911 compliance, and providing packetized traffic for 3G migration. In June of 2002, we introduced the Axxius(TM) 800 platform as part of our market diversification strategy and we are now recognizing the benefits of that investment with 28% of our Q3 revenue generated from sales to the wireless market. We intend to continue our development efforts in this area to enable wireless carrier customers to migrate to new packet-based solutions for even greater operational efficiencies.
"In addition to gaining momentum in the wireless market, earlier this month we announced successful trials and a strategic partnership for fiber-to-the-premises (FTTP) deployments. Our product development of the Exxtenz(TM) Business Optical Network Terminal (B-ONT) began to pay off as well as in the third quarter as we recognized our first meaningful revenue for this new access technology. We are clearly delivering results on our investment in packetized access technologies that are designed to lower the cost of delivering new broadband services to businesses and end users. During the third quarter, we added new features to our Adit® 600 platform, and successfully trialed new VoIP features for international customers. We are seeing increased demand for our Adit 600 platform both for traditional voice deployments and for VoIP applications. We are extremely encouraged by our customers' adoption of the Adit 600 platform.
"According to market analysts, network edge spending overtook core spending in 2001 and they predict that during 2004, edge expenditures will outpace the core by 3 to 1. Our plan is to continue our research and development efforts in market-disruptive technologies and take advantage of the shift in spending towards packet-based access solutions. We believe we can take advantage of this shift as our products support both traditional circuit-based telephony and packet-based solutions. We believe we are very well-positioned to deliver the cost-effective solutions required by service providers at the edge of the network.
"In summary, we are very pleased with the results of our third quarter. We believe that we are demonstrating the results of the strategy that we put in place over the last two years."
Carrier Access will hold a conference call today at 4:30 p.m. EDT to review these results. The call is open to the public. Those who wish to participate should dial 415-228-4835, domestically or internationally, at least fifteen minutes prior to the scheduled start time for the call, and reference Carrier Access.
Carrier Access has also scheduled this event to be broadcast live via web cast and replayed until 5:00 p.m. EST, December 7, 2003. To access this web cast please go to the Investor Relations page at www.carrieraccess.com/investors, or www.companyboardroom.com.
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CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Net revenue $15,927 10,534 $39,286 38,787
Cost of goods sold 9,169 6,342 22,010 25,851
------- ------ ------- -------
Gross profit 6,758 4,192 17,276 12,936
------- ------ ------- -------
Operating expenses:
Research and development 2,525 5,283 7,638 20,069
Sales and marketing 2,763 4,157 8,183 14,186
General and administrative 1,277 1,675 3,842 10,492
Bad debt expense (recoveries) (423) 7 (2,981) 3,060
Asset impairment charges - 8,995 - 8,995
Other intangible amortization - 72 - 216
------- ------ ------- -------
Total operating expenses 6,142 20,189 16,682 57,018
------- ------ ------- -------
Income (loss) from operations 616 (15,997) 594 (44,082)
Other income, net 86 128 258 592
------- ------ ------- -------
Income (loss) before income taxes 702 (15,869) 852 (43,490)
Income tax expense (benefit) - (1,016) (89) 1,142
------- ------ ------- -------
Net income (loss) $702 $(14,853) $941 $(44,632)
======= ====== ======= ========
Income (loss) per share:
Basic $0.03 $(0.60) $0.04 $(1.80)
Diluted $0.03 $(0.60) $0.04 $(1.80)
Weighted average common shares:
Basic
24,807 24,766 24,787 24,753
Diluted
25,952 24,766 25,619 24,753
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CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share amounts)
September 30, December 31,
2003 2002
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $14,166 $14,900
Marketable securities available for sale 17,020 10,828
Accounts receivable, net 12,664 8,598
Other receivables 1,107 174
Income tax receivable 83 6,989
Inventory, net 23,694 24,134
Prepaid expenses and other 1,039 1,024
-------- ---------
Total current assets 69,773 66,647
Property and equipment, net of accumulated
depreciation and amortization 7,049 9,462
Other assets 345 328
-------- ---------
Total assets $77,167 $76,437
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,412 $5,437
Accrued expenses and other liabilities 3,587 4,886
-------- ---------
Total current liabilities 9,999 10,323
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000
shares authorized and no shares issued or
outstanding at September 30, 2003 and
December 31, 2002 -- --
Common stock, $0.001 par value, 60,000
shares authorized and 24,834 shares issued
and outstanding at September 30, 2003 and
24,771 shares issued and outstanding at
December 31, 2002 25 25
Additional paid-in capital 85,861 85,785
Deferred compensation (20) (65)
Accumulated deficit (18,702) (19,643)
Accumulated other comprehensive income 4 12
-------- ---------
Total stockholders' equity 67,168 66,114
-------- ---------
Total liabilities and stockholders' equity $77,167 $76,437
======== =========
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CARRIER ACCESS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine Months Ended
September 30,
------------------
2003 2002
---- ----
Cash flows from operating activities:
Net income (loss) $941 $(44,632)
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization expense 2,951 4,678
Provision for (recoveries of) doubtful accounts,
net (2,981) 3,060
Provision for inventory obsolescence (212) 2,608
Stock-based compensation 70 169
Asset impairment charges - 8,995
Deferred income tax expense - 7,318
Changes in operating assets and liabilities:
Accounts receivable (1,086) 6,307
Notes receivable - (775)
Income taxes receivable 6,906 (4,211)
Inventory 652 9,233
Prepaid expenses and other (970) 784
Accounts payable and accrued expenses (323) (5,201)
-------- ---------
Net cash provided (used) by
operating activities 5,948 (11,667)
-------- ---------
Cash flows from investing activities:
Purchases of property and equipment (532) (1,611)
Purchases of marketable securities, gross (14,208) (8,245)
Sales and maturities of marketable securities 8,007 7,259
-------- ---------
Net cash used by investing
activities (6,733) (2,597)
-------- ---------
Cash flows from financing activities:
Proceeds from exercise of stock options 51 14
-------- ---------
Net decrease in cash and cash equivalents (734) (14,250)
Cash and cash equivalents at beginning of period 14,900 24,741
-------- ---------
Cash and cash equivalents at end of period $14,166 $10,491
======== =========
Supplemental cash flow disclosures:
Cash received for income taxes $6,995 $1,449
======== =========
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Contact:
Carrier Access Corporation
Jane Salance, 303-442-5455
Fax: 303-218-5797
jsalance@carrieraccess.com
www.carrieraccess.com
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