Sonus Networks Reports 2010 Third Quarter Results
WESTFORD, Mass., Nov. 2, 2010 /PRNewswire via COMTEX News Network/ -- Sonus Networks, Inc. (Nasdaq: SONS), a market leader in next generation IP-based network solutions, today announced results for the quarter ended September 30, 2010.
Revenue for the third quarter of fiscal 2010 was $42.7 million, compared to $61.2 million in the second quarter of fiscal 2010 and $56.2 million for the third quarter of fiscal 2009. The Company's net loss on a GAAP basis for the third quarter of fiscal 2010 was $22.3 million, or $0.08 per share, compared to net income of $0.3 million, or $0.00 per diluted share, for the second quarter of fiscal 2010, and a net loss of $3.4 million, or $0.01 per share, for the third quarter of fiscal 2009.
"We are pleased with the customer growth we achieved during the third quarter across our entire product line. The timing of revenue from several large orders negatively impacted our third quarter operating results but is not expected to negatively impact our results for the year," said Raymond P. Dolan, President and Chief Executive Officer of Sonus. "We continue to have a positive outlook ahead and remain focused on leveraging all of our product platforms to accelerate growth and profitability."
2010 Guidance
The Company expects to achieve total revenue between $225 and $245 million for 2010. For 2010, Non-GAAP gross margin is expected to be within the range of 58% to 62%, and total Non-GAAP operating expenses are expected to be in the range of $145 to $148 million.
Conference Call Details:
Sonus Networks will host a conference call for analysts and investors to discuss its third quarter 2010 results as well as certain forward-looking information today at 4:45 p.m. ET.
To listen live via telephone: Dial-in number: 800-743-4304 International Callers: +1 212-231-2900
To listen via internet:
Sonus Networks will host a live webcast of the conference call. To access the webcast, visit www.sonusnet.com, About Us, Investor Relations.
About Sonus Networks
Sonus Networks, Inc. is a leader in IP networking with proven expertise in delivering secure, reliable and scalable next generation infrastructure and subscriber solutions. With customers in over 50 countries across the globe and over a decade of experience in transforming networks to IP, Sonus has enabled service providers and enterprises to capture and retain users and generate significant ROI. Sonus products include media and signaling gateways, policy/routing servers, session border controllers and subscriber feature servers. Sonus products are supported by a global services team with experience in design, deployment and maintenance of some of the world's largest and most complex IP networks. For more information visit www.sonusnet.com.
This release may contain forward-looking statements regarding future events that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to Item 1A "Risk Factors" of Sonus' Annual Report on Form 10-K for the year ended December 31, 2009 and Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Any forward-looking statements represent Sonus' views only as of today and should not be relied upon as representing Sonus' views as of any subsequent date. While Sonus may elect to update forward-looking statements at some point, Sonus specifically disclaims any obligation to do so, except as required by law.
Sonus is a registered trademark of Sonus Networks, Inc. All other company and product names may be trademarks of the respective companies with which they are associated.
For more information, please contact:
Wayne Pastore Fran Murphy 978-614-8291 978-614-8148 wpastore@sonusnet.com fmurphy@sonusnet.com
SONUS NETWORKS, INC. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited)
Three months ended ------------------ September 30, June 30, September 30, 2010 2010 2009 ---- ---- ---- Revenue: Product $19,391 $36,796 $33,544 Service 23,348 24,385 22,621 ------ ------ ------ Total revenue 42,739 61,181 56,165 ------ ------ ------ Cost of revenue: Product 7,231 10,826 10,160 Service 11,730 11,842 10,755 ------ ------ ------ Total cost of revenue 18,961 22,668 20,915 ------ ------ ------ Gross profit 23,778 38,513 35,250 ------ ------ ------ Gross profit % Product 62.7% 70.6% 69.7% Service 49.8% 51.4% 52.5% Total gross profit % 55.6% 62.9% 62.8% Operating expenses: Research and development 16,226 15,106 14,141 Sales and marketing 11,836 12,392 11,527 General and administrative 17,157 10,971 11,578 Restructuring 1,114 - 1,533 ----- --- ----- Total operating expenses 46,333 38,469 38,779 ------ ------ ------ Income (loss) from operations (22,555) 44 (3,529) Interest expense (10) (30) (23) Interest income 439 466 787 Other income, net 1 1 12 --- --- --- Income (loss) before income taxes (22,125) 481 (2,753) Income tax provision (153) (170) (644) ---- ---- ---- Net income (loss) $(22,278) $311 $(3,397) ======== ==== ======= Earnings (loss) per share: Basic $(0.08) $- $(0.01) Diluted $(0.08) $- $(0.01) Shares used to compute earnings (loss) per share: Basic 275,412 275,051 273,907 Diluted 275,412 276,314 273,907
SONUS NETWORKS, INC. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited)
Nine months ended ----------------- September 30, September 30, 2010 2009 ---- ---- Revenue: Product $92,465 $89,267 Service 73,863 69,517 ------ ------ Total revenue 166,328 158,784 ------- ------- Cost of revenue: Product 30,358 27,041 Service 35,501 32,986 ------ ------ Total cost of revenue 65,859 60,027 ------ ------ Gross profit 100,469 98,757 ------- ------ Gross profit % Product 67.2% 69.7% Service 51.9% 52.6% Total gross profit % 60.4% 62.2% Operating expenses: Research and development 46,272 45,995 Sales and marketing 37,822 36,018 General and administrative 38,272 32,259 Restructuring 1,114 3,510 ----- ----- Total operating expenses 123,480 117,782 ------- ------- Loss from operations (23,011) (19,025) Interest expense (53) (94) Interest income 1,420 3,513 Other income, net 12 24 --- --- Loss before income taxes (21,632) (15,582) Income tax benefit (provision) (469) 341 ---- --- Net loss $(22,101) $(15,241) ======== ======== Loss per share: Basic $(0.08) $(0.06) Diluted $(0.08) $(0.06) Shares used to compute loss per share: Basic 275,107 273,518 Diluted 275,107 273,518
SONUS NETWORKS, INC. Condensed Consolidated Balance Sheets (in thousands) (unaudited)
September 30, December 31, 2010 2009 ---- ---- Assets Current assets: Cash and cash equivalents $81,245 $125,323 Marketable securities 247,908 239,223 Accounts receivable, net 34,710 47,998 Inventory, net 26,982 21,925 Deferred income taxes 650 562 Other current assets 19,657 17,508 ------ ------ Total current assets 411,152 452,539 Property and equipment, net 16,588 14,646 Intangible assets, net 1,928 341 Goodwill 5,056 5,053 Investments 84,314 49,598 Deferred income taxes 960 711 Other assets 22,427 17,849 ------ ------ $542,425 $540,737 ======== ======== Liabilities and stockholders' equity Current liabilities: Accounts payable $19,040 $5,337 Accrued expenses 24,126 19,292 Current portion of deferred revenue 56,014 74,748 Current portion of long-term liabilities 492 753 --- --- Total current liabilities 99,672 100,130 Deferred revenue 35,818 25,242 Long-term liabilities 911 1,127 --- ----- Total liabilities 136,401 126,499 ------- ------- Commitments and contingencies Stockholders equity: Common stock 279 277 Additional paid-in capital 1,299,983 1,286,326 Accumulated deficit (900,911) (878,810) Accumulated other comprehensive income 6,940 6,712 Treasury stock (267) (267) ---- ---- Total stockholders' equity 406,024 414,238 ------- ------- $542,425 $540,737 ======== ========
SONUS NETWORKS, INC. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)
Nine months ended ----------------- September 30, September 30, 2010 2009 ---- ---- Cash flows from operating activities: Net loss $(22,101) $(15,241) Adjustments to reconcile net loss to cash flows provided by operating activities: Depreciation and amortization of property and equipment 8,134 7,497 Amortization of intangible assets 413 184 Stock-based compensation 12,410 9,889 Loss on disposal of property and equipment 81 173 Deferred income taxes 60 (137) Changes in operating assets and liabilities: Accounts receivable 13,471 41,600 Inventory (10,360) (4,217) Other operating assets 1,484 (7,516) Accounts payable 12,704 (3,212) Accrued expenses 4,477 (12,999) Accrued litigation settlements - (9,600) Deferred revenue (8,347) 4,240 ------ ----- Net cash provided by operating activities 12,426 10,661 ------ ------ Cash flows from investing activities: Purchases of property and equipment (9,193) (4,813) Purchase of intangible assets (2,000) - Purchases of marketable securities (283,461) (179,416) Sale/maturities of marketable securities 236,698 228,979 ------- ------- Net cash provided by (used in) investing activities (57,956) 44,750 ------- ------ Cash flows from financing activities: Sale of common stock in connection with employee stock purchase plan 1,353 1,119 Proceeds from exercise of stock options 327 32 Payment of tax withholding obligations related to net share settlements of restricted stock awards (572) (531) Principal payments of capital lease obligations (194) (189) ---- ---- Net cash provided by financing activities 914 431 --- --- Effect of exchange rate changes on cash and cash equivalents 538 856 --- --- Net increase (decrease) in cash and cash equivalents (44,078) 56,698 Cash and cash equivalents, beginning of year 125,323 122,207 ------- ------- Cash and cash equivalents, end of period $81,245 $178,905 ======= ========
SONUS NETWORKS, INC. Supplemental Information (In thousands) (unaudited) The following tables provide the details of stock-based compensation and amortization of intangible assets included in the Company's Condensed Consolidated Statements of Operations and the line items in which these amounts are reported. Additional information regarding these items is available in the Investor Relations section of our website at http://www.sonusnet.com. The information contained on our website or that can be accessed through our website should not be considered to be part of, or incorporated into, this press release.
Three months ended ------------------ September September 30, June 30, 30, 2010 2010 2009 ---- ---- ---- Stock-based compensation Cost of revenue - product $105 $89 $67 Cost of revenue - service 396 404 483 --- --- --- Cost of revenue 501 493 550 --- --- --- Research and development expense 617 665 774 Sales and marketing expense 647 688 885 General and administrative expense 4,947 1,366 930 ----- ----- --- Operating expense 6,211 2,719 2,589 ----- ----- ----- Total stock-based compensation $6,712 $3,212 $3,139 ====== ====== ====== Amortization of intangible assets Cost of revenue - product $37 $38 $40 Research and development 100 100 - --- --- --- Total amortization of intangible assets $137 $138 $40 ==== ==== ===
Nine months ended ----------------- September September 30, 30, 2010 2009 ---- ---- Stock-based compensation Cost of revenue - product $265 $298 Cost of revenue - service 1,219 1,335 ----- ----- Cost of revenue 1,484 1,633 ----- ----- Research and development expense 1,888 2,643 Sales and marketing expense 2,064 3,419 General and administrative expense 6,974 2,194 ----- ----- Operating expense 10,926 8,256 ------ ----- Total stock-based compensation $12,410 $9,889 ======= ====== Amortization of intangible assets Cost of revenue - product $113 $184 Research and development 300 - --- --- Total amortization of intangible assets $413 $184 ==== ====
SOURCE Sonus Networks, Inc.
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