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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
January 22, 2003
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.)
5 CARLISLE ROAD, WESTFORD, MASSACHUSETTS 01886
(Address of Principal Executive Offices) (Zip Code)
(978) 692-8999
(Registrant's telephone number, including area code)
Item 5. OTHER EVENTS.
A copy of Sonus' press release, dated January 22, 2003, reporting its
actual financial results for the fourth quarter and fiscal year ended December
31, 2002, is attached as Exhibit 99.1 hereto and incorporated by reference
herein.
The press release filed as an exhibit to this report includes "safe harbor"
language pursuant to the Private Securities Litigation Reform Act of 1995, as
amended, indicating that certain statements about Sonus' business contained in
the press release are "forward-looking" rather than "historic." The press
release also states that these and other risks relating to Sonus' business are
set forth in the documents filed by Sonus with the Securities and Exchange
Commission.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibit
99.1 Press release dated January 22, 2003 reporting Sonus' actual financial
results for the fourth quarter and fiscal year ended December 31, 2002.
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: January 22, 2003 SONUS NETWORKS, INC.
By:
/s/ Stephen J. Nill
Stephen J. Nill
Chief Financial Officer, Vice President of
Finance and Administration and Treasurer
(Principal Financial and Accounting Officer)
( BW)(MA-SONUS)(SONS) Sonus Networks Reports 2002 Fourth Quarter and
Annual Financial Results
Business Editors
WESTFORD, Mass.--(BUSINESS WIRE)--Jan. 22, 2003--Sonus Networks,
Inc. (Nasdaq: SONS), a leading provider of voice infrastructure
solutions for the new public network, today reported its financial
results for its fourth quarter and fiscal year ended December 31,
2002, in accordance with U.S. generally accepted accounting principles
(GAAP).
Revenues for the fourth quarter of fiscal 2002 were $12.7 million
compared with $38.9 million in the same period last year. Net loss for
the fourth quarter of fiscal 2002 was $12.8 million or $0.07 per share
compared with a net loss for the fourth quarter of fiscal 2001 of
$13.4 million or $0.07 per share.
Revenues for fiscal year 2002 were $62.6 million compared with
$173.2 million for fiscal year 2001. Net loss for fiscal year 2002 was
$68.5 million or $0.36 per share compared with a net loss for fiscal
year 2001 of $645.4 million or $3.74 per share.
"We made considerable progress in building our business
fundamentals in Q4," said Hassan Ahmed, president and CEO, Sonus
Networks. "We reported a sequential increase in revenues and a reduced
net loss compared to the third quarter, and our cash balance increased
as well. The gains made in the quarter are reflective of progress with
our customers and our continued focus on Sonus' financial metrics."
During the quarter, Sonus announced that NTT Communications, one
of the world's leading carriers, is using Sonus' packet voice
infrastructure solutions to offload modem-generated Internet traffic
from its circuit-switched network, and has also begun a field trial of
enterprise VoIP services using the Sonus platform. Earlier this week,
Sonus announced that NuVox, an integrated communications provider
serving the Midwestern and Southeastern United States, selected Sonus
to develop a VoIP network that will carry all of NuVox's long distance
voice traffic, as well as offload Internet traffic from NuVox's
circuit-switched local voice network.
One of Sonus' existing customers, Global Crossing, achieved a
significant milestone during the quarter, highlighting the scalability
and robustness of Sonus' voice infrastructure solutions. Global
Crossing carried more than one billion minutes of voice traffic for
carrier and enterprise customers on its Sonus-based VoIP network in
the month of November alone.
Further expanding its presence in international markets, Sonus
announced relationships with two new distribution partners in the
quarter. Welltech Computer Corporation will provide the full range of
Sonus packet voice products to the Taiwanese carrier market, and
COMPTA will distribute and support the complete Sonus product line in
Portugal.
In November, Sonus was again named the leading provider of
carrier-class packet voice equipment, a position the company has held
for nine consecutive quarters. Market analysis firms In-Stat/MDR,
Infonetics Research and Synergy Research Group issued third quarter
2002 market share reports identifying Sonus as the industry leader in
several key service provider packet telephony market segments.
"Looking ahead, our 2003 priorities are clear," continued Ahmed.
"We are focused on building our customer base, expanding into new
target markets, and continuing to deliver the product innovations that
have set us apart in the market. Additionally, we will continue to
manage our business with precision, driving toward profitability."
About Sonus Networks
Sonus Networks, Inc., is a leading provider of packet voice
infrastructure products for the new public network. With its Open
Services Architecture(TM) (OSA), Sonus delivers end-to-end solutions
addressing a full range of carrier applications, including trunking,
residential access and Centrex, tandem switching, and IP voice
termination, as well as enhanced services. Sonus' award-winning voice
infrastructure solutions, including media gateways, softswitches and
network management systems, are deployed in service provider networks
worldwide. Sonus, founded in 1997, is headquartered in Westford,
Massachusetts. Additional information on Sonus is available at
http://www.sonusnet.com.
This release may contain projections or other forward-looking
statements regarding future events or the future financial performance
of Sonus 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 Sonus' Quarterly Report on Form 10-Q, dated November 13,
2002 and filed with the SEC, which identifies important risk factors
that could cause actual results to differ from those contained in the
forward-looking statements. These risk factors include, among others,
the adverse effect of recent developments in the telecommunications
industry, the weakened financial position of many service providers,
Sonus' ability to grow its customer base, dependence on new product
offerings, market acceptance of its products, rapid technological and
market change and manufacturing and sourcing risks. The Company
undertakes no duty to update any forward-looking statement to conform
the statement to actual results or changes in the Company's
expectations.
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.
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SONUS NETWORKS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
Dec. 31, Dec. 31,
2002 2001
Assets
Current assets:
Cash, cash equivalents and marketable
securities $111,167 $125,067
Accounts receivable, net 2,956 9,440
Inventories 10,776 18,865
Other current assets 3,806 2,952
Total current assets 128,705 156,324
Property and equipment, net 11,174 23,335
Goodwill and purchased intangible assets, net 1,174 4,536
Other assets, net 480 689
$141,533 $184,884
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $37,521 $36,301
Accrued restructuring expenses 3,143 8,596
Deferred revenue 29,235 13,349
Current portion of long-term obligations 1,606 1,055
Total current liabilities 71,505 59,301
Long-term obligations, less current portion 3,293 12,698
Convertible subordinated notes 10,000 10,000
Stockholders' equity:
Common stock 207 205
Capital in excess of par value 858,126 860,883
Accumulated deficit (797,868) (729,398)
Deferred compensation (3,469) (28,721)
Treasury stock (261) (84)
Total stockholders' equity 56,735 102,885
$141,533 $184,884
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
US GAAP and Adjusted Results
(In thousands, except per share data)
(unaudited)
Three months ended
December 31, 2002
US GAAP Adjustments Adjusted
Results Results
(A)
Revenues $12,660 $-- $12,660
Cost of
revenues 6,298 -- 6,298
Gross
profit 6,362 -- 6,362
Operating
expenses:
Research and
development 8,783 -- 8,783
Sales and
marketing 5,656 -- 5,656
General and
administrative 539 -- 539
Stock-based
compensation 3,841 (3,841) --
Amort. of
goodwill and
purchased
intangible
assets 358 (358) --
Write-off of
goodwill and
purchased
intangible
assets 175 (175) --
Restructuring
charges
(benefit),
net 16 (16) --
Total
operating
expenses 19,368 (4,390) 14,978
Loss from
operations (13,006) 4,390 (8,616)
Interest
expense (238) -- (238)
Interest
income 424 -- 424
Net loss $(12,820) $4,390 $(8,430)
Basic and
diluted net
loss per
share $(0.07)
Shares used in
computation 195,648
Three months ended
December 31, 2001
US GAAP Adjustments Adjusted
Results Results
(A)
Revenues $38,863 $-- $38,863
Cost of
revenues 17,398 -- 17,398
Gross
profit 21,465 -- 21,465
Operating
expenses:
Research and
development 15,642 -- 15,642
Sales and
marketing 10,504 -- 10,504
General and
administrative 3,796 -- 3,796
Stock-based
compensation 7,161 (7,161) --
Amort. of
goodwill and
purchased
intangible
assets 480 (480) --
Write-off of
goodwill and
purchased
intangible
assets (1,984) 1,984 --
Restructuring
charges
(benefit),
net - - --
Total
operating
expenses 35,599 (5,657) 29,942
Loss from
operations (14,134) 5,657 (8,477)
Interest
expense (219) -- (219)
Interest
income 952 -- 952
Net loss $(13,401) $5,657 $(7,744)
Basic and
diluted net
loss per
share $(0.07)
Shares used in
computation 181,260
(A) These Adjusted Condensed Consolidated Statements of Operations are
for informational purposes only and are not in accordance with US
generally accepted accounting principles (GAAP). These statements
exclude the impact of the amortization of stock-based
compensation, amortization of goodwill and purchased intangible
assets, the write-off of goodwill and purchased intangible assets
and restructuring charges (benefits).
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
US GAAP and Adjusted Results
(In thousands, except per share data)
Year ended
December 31, 2002
US GAAP Adjustments Adjusted
Results Results
(A)
Revenues $62,558 $-- $62,558
Cost of
revenues:
Write-off of
inventory and
purchase
commitments 9,434 (9,434) --
Other cost of
revenues 30,868 -- 30,868
Total cost of
revenues 40,302 (9,434) 30,868
Gross profit 22,256 9,434 31,690
Operating
expenses:
Research and
development 45,308 -- 45,308
Sales and
marketing 27,863 -- 27,863
General and
administrative 6,140 -- 6,140
Stock-based
compensation 19,496 (19,496) --
Amort. of
goodwill and
purchased
intangible
assets 1,514 (1,514) --
Write-off of
goodwill and
purchased
intangible
assets 1,848 (1,848) --
Restructuring
charges
(benefit), net (10,125) 10,125 --
In-process
research and
development -- -- --
Total operating
expenses 92,044 (12,733) 79,311
Loss from
operations (69,788) 22,167 (47,621)
Interest
expense (676) -- (676)
Interest income 1,994 -- 1,994
Net loss $(68,470) $22,167 $(46,303)
Basic and
diluted net
loss per share $(0.36)
Shares used in
computation 189,889
Year ended
December 31, 2001
US GAAP Adjustments Adjusted
Results Results
(A)
Revenues $173,199 $-- $173,199
Cost of
revenues:
Write-off of
inventory and
purchase
commitments -- -- --
Other cost of
revenues 75,698 -- 75,698
Total cost of
revenues 75,698 -- 75,698
Gross profit 97,501 -- 97,501
Operating
expenses:
Research and
development 65,004 -- 65,004
Sales and
marketing 42,267 -- 42,267
General and
administrative 13,068 -- 13,068
Stock-based
compensation 75,500 (75,500) --
Amort. of
goodwill and
purchased
intangible
assets 107,759 (107,759) --
Write-off of
goodwill and
purchased
intangible
assets 374,735 (374,735) --
Restructuring
charges
(benefit), net 25,807 (25,807) --
In-process
research and
development 43,800 (43,800) --
Total operating
expenses 747,940 (627,601) 120,339
Loss from
operations (650,439) 627,601 (22,838)
Interest
expense (567) -- (567)
Interest income 5,574 -- 5,574
Net loss $(645,432) $627,601 $(17,831)
Basic and
diluted net
loss per share $(3.74)
Shares used in
computation 172,382
(A) These Adjusted Condensed Consolidated Statements of Operations are
for informational purposes only and are not in accordance with US
generally accepted accounting principles (GAAP). These statements
exclude the impact of the write-off of inventory and purchase
commitments, amortization of stock-based compensation,
amortization of goodwill and purchased intangible assets, the
write-off of goodwill and purchased intangible assets,
restructuring charges (benefit) and in-process research and
development expenses.
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--30--KC/bo*
CONTACT: Sonus Networks, Inc.
Investor Relations:
Jocelyn Philbrook, 978/589-8672
jphilbrook@sonusnet.com
or
Media Relations:
Beth Morrissey, 978/589-8579
bmorrissey@sonusnet.com
KEYWORD: MASSACHUSETTS
INDUSTRY KEYWORD: SOFTWARE NETWORKING EARNINGS
SOURCE: Sonus Networks, Inc.