View:
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
May 9, 2005
Date of Report (Date of earliest event reported)
------------------------------------------------
SONUS NETWORKS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-30229 04-3387074
___________ _________ __________
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
250 APOLLO DRIVE, CHELMSFORD, MASSACHUSETTS 01824
(Address of Principal Executive Offices) (Zip Code)
(978) 614-8100
(Registrant's telephone number, including area code)
================================================================================
- --------------------------------------------------------------------------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
The information in this Current Report on Form 8-K and the exhibit attached
hereto shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except as
shall be expressly set forth by specific reference in such a filing.
Item 2.02. Results of Operations and Financial Condition.
On May 9, 2005, Sonus Networks, Inc. issued a press release reporting its
financial results for the quarter ended March 31, 2005. A copy of the press
release is attached as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibit
The following exhibit relating to Item 2.02 shall be deemed to
be furnished, and not filed:
99.1 Press release of Sonus Networks, Inc. dated May 9, 2005
reporting financial results for the quarter ended March 31,
2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 9, 2005 SONUS NETWORKS, INC.
By:
/s/ Ellen Richstone
-------------------
Ellen Richstone
Chief Financial Officer
Exhibit Index
99.1 Press release of Sonus Networks, Inc. dated May 9, 2005 reporting financial
results for the quarter ended March 31, 2005.
Exhibit 99.1
Sonus Networks Reports 2005 First Quarter Financial Results
CHELMSFORD, Mass.--(BUSINESS WIRE)--May 9, 2005--Sonus Networks,
Inc. (Nasdaq: SONS), a leading supplier of service provider voice over
IP (VoIP) infrastructure solutions, today reported its financial
results for the first quarter ended March 31, 2005.
Revenues for the first quarter of fiscal 2005 were $33.6 million
compared with $45.1 million in the fourth quarter of fiscal 2004. Net
loss for the first quarter of fiscal 2005 was $3.7 million or a loss
of $0.01 per share compared with net income for the fourth quarter of
fiscal 2004 of $6.3 million or $0.02 per diluted share. Revenues for
the first quarter of fiscal 2004 were $36.5 million, and net income
was $3.0 million or $0.01 per diluted share.
"We achieved a number of key objectives in the quarter, including
strong order activity, the expansion of our customer base,
establishment of new global partnerships and the introduction of new
software for the ISP market. We are, of course, disappointed that our
progress is not reflected in our revenue result this quarter," said
Hassan Ahmed, chairman and CEO, Sonus Networks. "Looking ahead, the
world's service providers will continue their migrations to VoIP, and
we are pleased that Sonus has a leading position in this important
market."
During the first quarter, Sonus announced four new customer
deployments in North America and in Europe. In the U.S., America
Online is deploying Sonus' technology to deliver its new Internet
Phone Service, which is changing the very nature of voice service,
making it a pathway not just for conversations, but also for a wide
range of next-generation interactive applications. Also in the U.S.,
WebEx Communications is augmenting its WebEx MediaTone Network with a
VoIP solution from Sonus to deliver new IP-based conferencing services
to its customers. In Mexico, Marcatel is building out a VoIP network
with Sonus to provide access services to businesses and cable
operators. In Europe, Slovak Telecom has implemented a Sonus-based
network to support the delivery of prepaid and postpaid calling
services.
Demonstrating the scalability and reliability of the Sonus
solution, three existing customers extended their Sonus-based networks
during the first quarter. XO Communications announced their new
business service, XOptions(R) Flex, which is the first in a series of
the carrier's new enhanced services delivered over the XO national IP
network and Sonus technology. Leveraging the Sonus Open Services
Architecture(TM) (OSA), XO Communications will deliver a broad range
of IP telephony applications and features to businesses throughout the
United States. South Carolina-based NuVox also announced that it is
introducing a new business VoIP service that will be delivered over
its Sonus-based network. Further, Global Crossing, one of the first
providers to decommission a legacy switch in the core of its network
and replace it with a VoIP switch, announced that it is continuing to
decommission legacy switches in four additional cities. This project
is expected to create increased network efficiencies and enhance the
seamless delivery of converged IP services.
Underscoring Sonus' success with both existing and new customers,
the company was again ranked the number one provider of carrier-class
packet voice equipment for the fourth quarter of 2004. Industry
research firms reported that Sonus increased its market share in
several segments of the carrier packet voice market, growing faster
than the market and the competition in 2004. In-Stat/MDR and Synergy
Research Group named Sonus the market share leader, recognizing Sonus
as the top equipment vendor in several major service provider packet
telephony market segments. Additionally, Sonus estimated that at the
end of Q1, service providers globally were carrying an estimated 12
billion minutes per month of customer traffic on their Sonus-based
networks.
In January 2005, Sonus entered into a global reseller agreement
with Samsung Electronics Company. Under the terms of this
non-exclusive agreement, Samsung is able to sell and support Sonus
VoIP solutions to mobile operators around the world.
Continuing the expansion of its worldwide presence, Sonus
announced the opening of a software development and regional support
center in Bangalore, India. Sonus Networks India Pvt. Ltd. will
concentrate on the development of VoIP applications, software design
and quality assurance services in support of Sonus' product portfolio.
The establishment of Sonus' center in India represents another phase
in the company's commitment to providing VoIP applications and
services to customers around the globe.
About Sonus Networks
Sonus Networks, Inc. is a leading provider of voice over IP (VoIP)
infrastructure solutions for wireline and wireless service providers.
With its Open Services ArchitectureTM (OSA), Sonus delivers end-to-end
solutions addressing a full range of carrier applications, including
trunking and tandem switching, residential and business access,
network border switching and enhanced services. Sonus' voice
infrastructure solutions, including media gateways, softswitches and
network management systems, are deployed in service provider networks
worldwide. Founded in 1997, Sonus is headquartered in Chelmsford,
Massachusetts of U.S. Additional information on Sonus is available at
http://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 the "Risk Factors" section of Sonus' Annual
Report on Form 10-K, dated March 15, 2005, filed with the SEC, which
identify important risk factors that could cause actual results to
differ from those contained in the forward-looking statements. Risk
factors include among others: the impact of material weaknesses in our
disclosure controls and procedures and our internal control over
financial reporting on our ability to report our financial results
timely and accurately; the unpredictability of our quarterly financial
results; risks associated with our international expansion and growth;
consolidation in the telecommunications industry; risks associated
with the investigation of the company by the SEC; and potential costs
resulting from pending securities litigation against the company. 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.
Sonus is a registered trademark of Sonus Networks. Open Services
Architecture is a trademark of Sonus Networks. All other company and
product names may be trademarks of the respective companies with which
they are associated
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
March 31, December 31, March 31,
2005 2004 2004
-------- --------- --------
Revenues $ 33,610 $ 45,083 $ 36,532
Cost of revenues 12,112 13,757 12,400
-------- --------- --------
Gross profit 21,498 31,326 24,132
-------- --------- --------
Gross profit % 64.0% 69.5% 66.1%
Operating expenses:
Research and development 11,017 9,348 8,928
Sales and marketing 9,027 8,935 6,860
General and administrative 6,800 7,385 4,827
Stock-based compensation - 65 379
Amortization of purchased intangible
assets - 601 600
-------- --------- --------
Total operating expenses 26,844 26,334 21,594
-------- --------- --------
Income (loss) from operations (5,346) 4,992 2,538
-------- --------- --------
Interest expense (128) (119) (122)
Interest income 1,875 1,477 765
-------- --------- --------
Income (loss) before provision for
income taxes (3,599) 6,350 3,181
Provision for income taxes 96 89 167
-------- --------- --------
Net income (loss) $ (3,695) $ 6,261 $ 3,014
======== ========= ========
Net income (loss) per share:
Basic $ (0.01) $ 0.03 $ 0.01
Diluted $ (0.01) $ 0.02 $ 0.01
Shares used in computation:
Basic 247,877 247,134 244,607
Diluted 247,877 256,443 255,592
SONUS NETWORKS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2005 2004
----------- -------------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $303,824 $292,076
Accounts receivable, net 27,631 32,486
Inventory, net 31,256 28,346
Other current assets 11,653 10,891
----------- -------------
Total current assets 374,364 363,799
Property and equipment, net 11,145 8,217
Long-term marketable securities 7,488 21,029
Other assets 864 783
----------- -------------
$393,861 $393,828
=========== =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $26,942 $26,894
Accrued restructuring expenses 189 186
Current portion of deferred revenue 69,267 65,105
Current portion of long-term liabilities 25 30
----------- -------------
Total current liabilities 96,423 92,215
----------- -------------
Long-term deferred revenue, less current
portion 22,746 25,960
Long-term liabilities, less current portion 614 613
Convertible subordinated note 10,000 10,000
Stockholders' equity:
Common stock 250 250
Capital in excess of par value 1,051,875 1,049,142
Accumulated deficit (787,780) (784,085)
Treasury stock (267) (267)
----------- -------------
Total stockholders' equity 264,078 265,040
----------- -------------
$393,861 $393,828
=========== =============
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
March 31, December 31, March 31,
2005 2004 2004
--------- ------------ --------
Cash flows from operating activities:
Net income (loss) $ (3,695) $ 6,261 $ 3,014
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 1,476 1,617 1,632
Tax benefit from stock options
exercised - 67 -
Stock-based compensation - 65 379
Amortization of purchased intangible
assets - 601 600
Changes in current assets and
liabilities
Accounts receivable 4,855 2,916 (8,308)
Inventory (2,910) (780) (1,553)
Other current assets (762) 1,970 (1,455)
Accounts payable 1,334 (2,445) 2,403
Accrued expenses (1,330) 38 (1,169)
Deferred revenue 948 3,076 7,760
--------- ---------- ---------
Net cash provided by (used in)
operating activities (84) 13,386 3,303
--------- ---------- ---------
Cash flows from investing activities:
Purchase of property and equipment (4,303) (2,696) (2,230)
Maturities (purchases) of marketable
securities, net 2,977 (8,118) 15,910
Other assets (81) (20) 136
--------- ---------- ---------
Net cash provided by (used in)
investing activities (1,407) (10,834) 13,816
--------- ---------- ---------
Cash flows from financing activities:
Sales of common stock in connection
with employee stock purchase plan 2,313 - 796
Proceeds from exercise of stock
options 420 2,565 400
Payments of long-term liabilities (58) (31) (59)
--------- ---------- ---------
Net cash provided by financing
activities 2,675 2,534 1,137
--------- ---------- ---------
Net increase in cash and cash
equivalents 1,184 5,086 18,256
--------- ---------- ---------
Cash and cash equivalents, beginning
of period 121,931 116,845 133,715
--------- ---------- ---------
Cash and cash equivalents, end of
period $ 123,115 $ 121,931 $151,971
========= ========== =========
CONTACT: Sonus
Investor Relations:
Jocelyn Philbrook, 978-614-8672
jphilbrook@sonusnet.com
or
Media Relations:
Greenough for Sonus
Sarah McAuley, 617-894-2807
smcauley@greenoughcom.com