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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
August 20, 2004
Date of Report (Date of earliest event reported)
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SONUS NETWORKS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-30229 04-3387074
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(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)
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Item 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
The information in this Current Report on Form 8-K and the exhibits
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.
On August 20, 2004, Sonus Networks, Inc. issued a press release reporting
its financial results for the quarter ended June 30, 2004. A copy of the press
release is attached as Exhibit 99.1 hereto.
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: August 20, 2004 SONUS NETWORKS, INC.
By:
/s/ Albert A. Notini
-------------------------------------
Albert A. Notini
President and Chief Operating Officer
Exhibit Index
99.1 Press release of Sonus Networks, Inc. dated August 20, 2004 reporting
financial results for the quarter ended June 30, 2004.
Exhibit 99.1
Sonus Networks Reports 2004 Second Quarter Financial Results
CHELMSFORD, Mass.--(BUSINESS WIRE)--Aug. 20, 2004--
Revenues Increase 16% Sequentially, Profits Increase
to $0.02 Per Share;
Company Becomes Current On All Financial Reporting Requirements
Sonus Networks (Pink Sheets:SONS), a leading supplier of service
provider voice over IP (VoIP) infrastructure solutions, today reported
its financial results for the second quarter ended June 30, 2004.
Sonus today also filed its Form 10-Q for the second quarter of 2004
with the Securities and Exchange Commission (SEC). Sonus will hold a
conference call to review its financial results at 8:00 am Eastern
time, Monday, August 23, 2004.
Revenues for the second quarter of fiscal 2004 were $42.4 million
compared with $36.5 million for the first quarter of fiscal 2004 and
$15.4 million for the second quarter of fiscal 2003. Net income for
the second quarter of fiscal 2004 was $4.9 million or $0.02 per share
compared with a net income of $3.0 million or $0.01 per share for the
first quarter of fiscal 2004 and a net loss of $7.3 million or $0.03
per share for the second quarter of fiscal 2003.
Revenues for the first six months of fiscal 2004 were $78.9
million compared with $24.6 million in the same period last year. Net
income for the first six months of fiscal 2004 was $7.9 million or
$0.03 per share compared with a net loss for the first six months of
fiscal 2003 of $17.0 million or $0.08 per share.
Today's filing of Sonus' Quarterly Report on Form 10-Q for the
second quarter brings the Company into full compliance with the SEC
periodic financial statement reporting requirements. The Company has
notified Nasdaq of its filing and will immediately apply for
re-listing on The Nasdaq National Market.
"With today's filings, we have successfully regained compliance
with SEC reporting requirements," said Hassan Ahmed, chief executive
officer and chairman, Sonus Networks. "While it would have been easy
to become distracted or lose momentum during this time, we remained
focused on winning new business, expanding our market presence and
delivering new solutions and services, and the results we are
reporting to you today underscore this. We are pleased with our
performance for the second quarter and are optimistic about the
opportunity ahead of us."
Sonus' growth in the second quarter was fueled by an increasingly
diversified customer base, as new customers selected Sonus for their
VoIP networks and existing customers expanded their deployments.
Reflecting this growth and diversity, AT&T Wireless, Qwest
Communications and Volo were each 10% customers for the second
quarter. In May, Global Crossing announced that it had achieved
several important milestones with its Sonus-based network. Global
Crossing more than doubled the minutes of traffic running on its VoIP
network between January 2003 and March 2004, and also boosted the
reliability of its network, recording 99.999 percent availability for
the same period. Also in the quarter, Volo Communications implemented
Sonus' VoIP infrastructure solutions to enhance its nationwide IP
backbone network.
As testament to its success with its customers, independent
industry research firms again recognized Sonus as the number one
provider of carrier voice over IP (VoIP) infrastructure. Synergy
Research Group and In-Stat/MDR issued first quarter market share
reports naming Sonus as the market share leader in several segments of
the VoIP equipment market.
At SUPERCOMM 2004, Sonus further extended its technology
advantage, launching access solutions to facilitate carriers'
deployment of voice over broadband (VoBB) services for consumers and
enterprises. Sonus' VoBB solution delivers basic local area calling
features as well as advanced IP-based functionality over broadband
technologies including DSL and cable, providing a lower-cost and
flexible alternative for residential and enterprise telephone
services. Additionally, Sonus also announced that its Insignus(TM)
Softswitch featuring the ASX Access Server provides enhanced services
via WiFi devices.
Company Conference Call, Webcast and Replay Information
Date: Monday, August 23, 2004
Time: 8:00 am Eastern
To listen via telephone: Dial-in number: +1-800-726-6572 or
+1-415-908-6280
To listen via the Internet: Sonus will host a live webcast of the
conference call. To access the webcast, visit the Sonus
Networks Investor Relations site at http://www.sonusnet.com.
Replay: A telephone playback of the call will be available
following the conference and can be accessed by calling
+1-800-633-8284 or +1-402-977-9140. The access code for the
replay is 21205824. The telephone playback will be available
through Tuesday, September 7, 2004.
The webcast will be available on the Sonus Networks Investor
Relations site through August 23, 2005. To access the replay of the
webcast, visit the Investor Relations site at http://www.sonusnet.com.
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 Architecture(TM) (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. Sonus, founded in 1997, is headquartered in Chelmsford,
Massachusetts. 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/A dated July 28, 2004 and filed with the SEC, and
the "Cautionary Statements" section of Sonus' Quarterly Report on Form
10-Q, dated August 20, 2004 and 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 possibility that Sonus may not be re-listed
on the The Nasdaq National Market and risks associated with the
pending securities litigation and SEC investigation. In addition, 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, GSX9000, Insignus and Sonus Insight are trademarks of
Sonus Networks. All other trademarks, service marks, registered
trademarks, or registered service marks are the property of their
respective owners.
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Three Three
Months Months Months
Ended Ended Ended
June 30, June 30, March 31,
2004 2003 2004
----------- ---------- ---------
Revenues $42,361 $15,366 $36,532
Cost of revenues 13,941 7,265 12,400
----------- ---------- ---------
Gross profit 28,420 8,101 24,132
Gross profit % 67.1% 52.7% 66.1%
Operating expenses:
Research and development 8,923 8,504 8,928
Sales and marketing 8,635 4,476 6,860
General and administrative 5,745 1,456 4,827
Stock-based compensation 136 645 379
Amort. of goodwill and purchased
intangible assets 600 602 600
----------- ---------- ---------
Total operating expenses 24,039 15,683 21,594
----------- ---------- ---------
Income (loss) from operations 4,381 (7,582) 2,538
Interest expense (121) (148) (122)
Interest income 891 461 765
----------- ---------- ---------
Income (loss) before provision for
income taxes 5,151 (7,269) 3,181
Provision for income taxes 217 32 167
----------- ---------- ---------
Net income (loss) $4,934 $(7,301) $3,014
=========== ========== =========
Net income (loss) per share:
Basic $0.02 $(0.03) $0.01
Diluted $0.02 $(0.03) $0.01
Shares used in computation:
Basic 245,390 215,970 244,607
Diluted 250,127 215,970 255,592
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
------------------- -----------------
Revenues $78,893 $24,575
Cost of revenues 26,341 11,358
------------------- -----------------
Gross profit 52,552 13,217
Gross profit % 66.6% 53.8%
Operating expenses:
Research and development 17,851 16,209
Sales and marketing 15,495 8,447
General and administrative 10,572 3,295
Stock-based compensation 515 1,569
Amort. of goodwill and purchased
intangible assets 1,200 1,204
------------------- -----------------
Total operating expenses 45,633 30,724
------------------- -----------------
Income (loss) from operations 6,919 (17,507)
Interest expense (243) (278)
Interest income 1,656 842
------------------- -----------------
Income (loss) before provision
for income taxes 8,332 (16,943)
Provision for income taxes 384 65
------------------- -----------------
Net income (loss) $7,948 $(17,008)
=================== =================
Net income (loss) per share:
Basic $0.03 $(0.08)
Diluted $0.03 $(0.08)
Shares used in computation:
Basic 244,906 207,483
Diluted 253,480 207,483
SONUS NETWORKS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2004 2003
------------- -------------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $278,376 $305,392
Accounts receivable, net 31,910 23,754
Inventory 20,201 13,739
Other current assets 14,559 6,935
------------- -------------
Total current assets 345,046 349,820
Property and equipment, net 6,399 5,009
Purchased intangible assets, net 1,202 2,402
Long-term marketable securities 25,266 -
Other assets, net 865 1,193
------------- -------------
$378,778 $358,424
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $30,670 $25,413
Accrued restructuring expenses 199 565
Current portion of deferred revenue 62,864 62,698
Current portion of long-term
liabilities 101 182
------------- -------------
Total current liabilities 93,834 88,858
Long-term deferred revenue, less current
portion 30,142 24,302
Long-term liabilities, less current portion 708 829
Convertible subordinated notes 10,000 10,000
Stockholders' equity:
Common stock 248 247
Capital in excess of par value 1,044,866 1,043,581
Accumulated deficit (800,614) (808,562)
Deferred compensation (139) (564)
Treasury stock (267) (267)
------------- -------------
Total stockholders' equity 244,094 234,435
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$378,778 $358,424
============= =============
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands, except per share data)
Three Three
Months Months
Ended Ended
June 30, June 30,
2004 2003
---------- ----------
Cash flows from operating activities:
Net income (loss) $4,934 $(7,301)
Adjustments to reconcile net income (loss) to net
cash used in
operating activities:
Depreciation 1,271 2,580
Stock-based compensation 136 645
Amortization of purchased intangible assets 600 602
Changes in current assets and liabilities
Accounts receivable 152 (6,250)
Inventory (4,909) (2,436)
Other current assets (6,169) (1,980)
Accounts payable 2,975 1,221
Accrued expenses 591 930
Deferred revenue (1,754) 11,796
---------- ----------
Net cash used in operating activities (2,173) (193)
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (2,063) (703)
Maturities of marketable securities 2,098 16,035
Purchases of marketable securities (4,286) (900)
Purchases of long-term investments (19,452) 115
Other assets 192 -
---------- ----------
Net cash (used in) provided by investing
activities (23,511) 14,547
---------- ----------
Cash flows from financing activities:
Net proceeds from sale of common stock to public - 56,730
Sales of common stock in connection with employee
stock purchase plan - -
Proceeds from exercise of stock options - 482
Payments of long-term liabilities (52) (424)
Repurchase of common stock - (5)
---------- ----------
Net cash (used in) provided by financing
activities (52) 56,783
---------- ----------
Net (decrease) increase in cash and cash
equivalents (25,736) 71,137
---------- ----------
Cash and cash equivalents, beginning of period 151,971 45,636
---------- ----------
Cash and cash equivalents, end of period $126,235 $116,773
========== ==========
CONTACT: Sonus Networks
Investor Relations:
Jocelyn Philbrook, 978-614-8672
jphilbrook@sonusnet.com
or
Media Relations:
Beth Morrissey, 978-614-8579
bmorrissey@sonusnet.com