UNITED
STATES
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
7, 2007
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.)
|
7
TECHNOLOGY PARK DRIVE, WESTFORD, MASSACHUSETTS 01886
(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, (the “Exchange Act”) 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 7,
2007, Sonus Networks, Inc. (the “Registrant”) issued a press release
reporting certain financial results for the quarter ended March 31, 2007. A
copy
of the press release is attached as Exhibit 99.1 hereto.
Item
9.01. Financial Statements and Exhibits.
|
(d)
|
Exhibits
|
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 7, 2007 reporting certain
financial results for the quarter ended March 31, 2007.
|
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 7, 2007
|
Sonus
Networks, Inc.
|
|
| |
|
|
| By: | /s/ Ellen Richstone | |
|
Ellen
Richstone
|
||
|
Chief
Financial Officer
|
||
Exhibit
Index
|
99.1
|
Press
release of Sonus Networks, Inc. dated May 7, 2007 reporting certain
financial results for the quarter ended March 31,
2007.
|
FINAL:
FOR IMMEDIATE RELEASE
For
more
information, please contact:
|
Investor
Relations:
|
Media
Relations:
|
|
Jocelyn
Philbrook
|
Sarah
McAuley
|
|
978-614-8672
|
978-614-8745
|
|
jphilbrook@sonusnet.com
|
smcauley@sonusnet.com
|
SONUS
NETWORKS REPORTS FIRST QUARTER 2007
FINANCIAL
RESULTS
WESTFORD,
Mass., May 7, 2007
- Sonus
Networks, Inc. (Nasdaq: SONS), a leading supplier
of service provider Voice over IP (VoIP) infrastructure solutions, today
reported selected financial results for the first quarter ended March 31,
2007.
Revenues
for the first quarter of fiscal 2007 were $71 million compared to $79 million
in
the fourth quarter of fiscal 2006 and $60 million in the first quarter of fiscal
2006. Cash, cash equivalents and investments increased by approximately $5
million during Q1FY07 to $366 million.
“Fueled
by the growth of the IP-services market, Sonus’ global business continues to
expand, and the demand for our solutions continues to increase. With another
quarter of year-over-year revenue growth, we're delivering results and executing
on our long term strategy,” said Hassan Ahmed, chairman and CEO of Sonus
Networks. “With the increased adoption of Sonus solutions by incumbent
operators, the transformation underway in today’s communications networks, and
the rapid evolution of today’s wireless networks, Sonus is gaining momentum and
is well positioned to execute on our goal of reaching our non-GAAP target
operating profit in the second half of 2007.”
--
more
--
1
Non-GAAP
Financial Metrics Highlights:
The
Company is not providing detailed GAAP or non-GAAP financial results for the
quarter at this time because
the Company has not yet completed its previously announced restatement of
certain historical consolidated financial statements resulting from its
voluntary review of the processes by which it has historically granted and
accounted for employee stock options.
The
Company had previously determined that it will restate certain historical
financial statements to record additional stock-based compensation expense,
related tax impacts and any other unrecorded adjustments previously determined
to be immaterial. The preliminary, non-GAAP financial metrics provided in this
release do not include associated stock-based compensation expense or any impact
that may result from the stock option review and related restatement.
| Ø |
First
quarter gross margins increased from our performance in Q4 and were
above
our target operating model range of 58 - 62%;
|
| Ø |
First
quarter operating expenses increased moderately from Q4 on an absolute
dollar basis with increases relating to continued investment in product
development efforts and increased customer trial
activity;
|
| Ø |
First
quarter non-GAAP net income decreased over Q1 2006 largely due to
the
costs associated with the voluntary stock option
review;
|
| Ø |
Deferred
revenue as of March 31, 2007 decreased to $90 million from December
31,
2006; and,
|
| Ø |
Finally,
cash and cash equivalents, marketable securities and long-term investments
as of March 31, 2007 were $366
million.
|
Update
on Stock-Based Compensation Review
As
previously announced, the Company concluded that the actual measurement dates
for financial accounting purposes of numerous stock option grants issued in
the
past differ from the recorded grant dates. The Company is now in the final
stage
of the review process and expects to file its restated and delayed financial
reports as soon as this stage is completed.
“We
appreciate the support of our stakeholders during this process. While this
review has been time consuming, I am committed to building a sustainable company
and believe it is critical for our financial statements to be accurate and
for
us to aggressively address any financial reporting concerns that may impact
our
company,” continued Ahmed.
--
more
--
2
Q1FY2007
Summary
The
first
quarter of 2007 marked a very strong start to a year of many new product
introductions by launching new technology for both the wireless and wireline
markets.
In
Q1,
Sonus extended its technology into the wireless market, unveiling its solution
for delivering Broadband-Cellular Convergence (BBCC). The solution leverages
advances in picocell and femtocell technologies integrated with the Sonus IP
Multimedia Subsystem (IMS)-ready network architecture. As part of its vision
for
the future of communications, in Q1, Sonus announced the strategic acquisition
of Zynetix Ltd, a UK-based provider of IP Mobile Switching Center (MSC) and
wireless access solutions. The acquisition, which closed in April 2007, will
enable Sonus to integrate Zynetix’ product portfolio into Sonus’ IMS-ready
architecture to help network operators extend the benefits of IP from the core
of the network to the customer premise. The result will be cost efficiencies
for
network operators, higher quality coverage for end users, and the ability to
introduce advanced voice, multimedia and data services over wireless networks.
Sonus is also working with the industry’s best-of-breed pico- and femtocell
providers to ensure the seamless deployment of its wireless network solutions
for Broadband-Cellular Convergence.
Also
in
the quarter, Sonus delivered the latest generation of its Network Border Switch
(NBS), a comprehensive security and peering solution that helps network
operators meet evolving demands for successfully managing traffic between
networks. The
latest version of the NBS is available for both the GSX9000™ Open Services
Switch, and the smaller form factor GSX4000™, providing carriers with a
right-sized, flexible solution along with the industry’s most robust security
solutions.
Further,
Sonus released a new version of its platform that now supports the newly
standardized method to provide both Local Number Portability (LNP) and Mobile
Number Portability (MNP) services for Japanese network operators. LNP service
with the new method was launched by NTT and many other Japanese network
operators in February 2007, enabling Japanese consumers to select their
preferred network provider, while keeping their existing phone numbers. With
more than a 75% market share position in Japan, according to Synergy Research
Group, Sonus allows operators to comply with this new regulation through a
software upgrade.
--
more
--
3
Finally,
Sonus continued to deliver some of the industry’s most advanced network
solutions for core trunking, access, and wireless networks, while continuing
to
develop exciting new services that networks operators can add to their feature
lists. Sonus added IMS standards-based billing support to the latest version
of
its platform to enable billing between different service providers’ IP voice
networks. The latest release includes support for a standards-based feature
that
enables operators to track individual calls throughout their own network and
when the call is handed off to other network operators. Sonus is one of the
first telecommunications vendors to support this IMS required billing
feature.
Sonus’
innovation and partnerships with the world’s leading network operators helped to
secure market share leadership in several key categories of the IP voice market.
Carrying more than 33 billion minutes of IP voice traffic per month, Sonus
leads
the market with 38% of IP voice traffic according to iLocus Research. Sonus
also
leads the wireless industry, carrying 37% of wireless IP voice traffic. Synergy
Research Group and Infonetics also reconfirmed Sonus’ market share leadership in
key segments of the IP voice industry for Q4 and FY2006.
“We
are
pleased that Sonus continues to deliver year-over-year revenue growth. Sonus
is
continuing to provide compelling products and solutions to network operators
globally, who are embracing our vision for the future of communications,” added
Ahmed. “The key driver of our success continues to be our unparalleled
innovation; Sonus solutions are proven to scale to meet the demands of
production voice networks. We are not slowing our pace of innovation; we’re
keeping our eye firmly on the future and aggressively accelerating towards
our
goals.”
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 comprehensive
IP
Multimedia Subsystem (IMS) solution, Sonus addresses the full range of carrier
applications, including residential and business voice services, wireless voice
and multimedia, trunking and tandem switching, carrier interconnection and
enhanced services. Sonus' voice infrastructure solutions are deployed in service
provider networks worldwide. Founded in 1997, Sonus is headquartered in
Westford, Massachusetts. Additional information on Sonus is available at
http://www.sonusnet.com.
--
more
--
4
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’ Quarterly Report on Form 10-Q dated May 8, 2006, filed with the SEC,
which identifies 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 and uncertainties
associated with the Company’s announced review of its historical stock option
grants and accounting, including the
impact on the Company’s financial statements or results, any tax liabilities or
penalties, the Company’s inability to timely report with the Securities and
Exchange Commission, whether
the
Nasdaq Listing Council will continue the delisting stay or grant an extension
so
that the company's securities will remain listed on the NASDAQ Global Select
Market,
regulatory actions or litigation arising out of the review or any restatement;
risks associated with our international expansion and growth; consolidation
in
the telecommunications industry; 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.
The
product information in this press release is for informational purposes only
and
is subject to change at Sonus’ sole discretion without notice. Sonus has no
obligation or commitment to develop or deliver any product or future release,
upgrade, feature, enhancement or function described in this release. The
information is provided “AS IS,” with all faults, and without any warranties
whatsoever, express or implied, including, but not limited to, warranties of
merchantability, performance, or fitness for a particular purpose.
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.
###
5