Sonus Networks Reports 2010 Second Quarter Results
Westford, MA, August 3, 2010 – Sonus Networks, Inc. (Nasdaq: SONS), a market leader in next generation IP-based network solutions, today announced results for the quarter ended June 30, 2010.
Revenue for the second quarter of fiscal 2010 was $61.2 million, compared to $62.4 million in the first quarter of fiscal 2010 and $61.6 million for the second quarter of fiscal 2009. The Company's net income on a GAAP basis for the second quarter of fiscal 2010 was $0.3 million, or $0.00 per diluted share, compared to a net loss of $0.1 million, or $0.00 per share, for the first quarter of fiscal 2010, and net income of $4.4 million, or $0.02 per diluted share, for the second quarter of fiscal 2009.
"We are pleased with our solid operating results in the second quarter," said Richard Nottenburg, President and Chief Executive Officer of Sonus Networks. "During the quarter, we successfully launched the NBS-5200 Network Border Switch on our next generation ConnexIP platform and are pleased with the traction we have made to date."
Conference Call Details
Sonus Networks will host a conference call for analysts and investors to discuss its second 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: 800-671-2810
International Callers: +1 303-223-2684
To listen via internet
Sonus Networks will host a live webcast of the conference call. To access the webcast, visit sonus.net, 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, Form 10-Q for the quarter ended March 31, 2010 and Form 10-Q for the quarter ended June 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
978-614-8291
wpastore@sonusnet.com
Fran Murphy
978-614-8148
fmurphy@sonusnet.com
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three months ended
------------------
March
June 30, 31, June 30,
2010 2010 2009
---- ---- ----
Revenue:
Product $36,796 $36,278 $36,320
Service 24,385 26,130 25,287
------ ------ ------
Total revenue 61,181 62,408 61,607
------ ------ ------
Cost of revenue:
Product 10,826 12,301 10,747
Service 11,842 11,929 10,568
------ ------ ------
Total cost of revenue 22,668 24,230 21,315
------ ------ ------
Gross profit 38,513 38,178 40,292
------ ------ ------
Gross profit %
Product 70.6% 66.1% 70.4%
Service 51.4% 54.3% 58.2%
Total gross profit % 62.9% 61.2% 65.4%
Operating expenses:
Research and development 15,106 14,940 15,501
Sales and marketing 12,392 13,594 12,344
General and administrative 10,971 10,144 10,186
Restructuring - - (7)
--- --- ---
Total operating expenses 38,469 38,678 38,024
------ ------ ------
Income (loss) from operations 44 (500) 2,268
Interest expense (30) (13) 8
Interest income 466 515 1,077
Other income, net 1 10 19
--- --- ---
Income before income taxes 481 12 3,372
Income tax benefit (provision) (170) (146) 1,011
---- ---- -----
Net income (loss) $311 $(134) $4,383
==== ===== ======
Earnings (loss) per share:
Basic
Diluted $- $- $0.02
$- $- $0.02
Shares used to compute earnings
(loss) per share:
Basic 275,051 274,701 273,543
Diluted 276,314 274,701 273,768
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Six months ended
----------------
June 30, June 30,
2010 2009
---- ----
Revenue:
Product $73,074 $55,723
Service 50,515 46,896
------ ------
Total revenue 123,589 102,619
------- -------
Cost of revenue:
Product 23,127 16,881
Service 23,771 22,231
------ ------
Total cost of revenue 46,898 39,112
------ ------
Gross profit 76,691 63,507
------ ------
Gross profit %
Product 68.4% 69.7%
Service 52.9% 52.6%
Total gross profit % 62.1% 61.9%
Operating expenses:
Research and development 30,046 31,854
Sales and marketing 25,986 24,491
General and administrative 21,115 20,681
Restructuring - 1,977
--- -----
Total operating expenses 77,147 79,003
------ ------
Loss from operations (456) (15,496)
Interest expense (43) (71)
Interest income 981 2,726
Other income, net 11 12
--- ---
Income (loss) before income
taxes 493 (12,829)
Income tax benefit (provision) (316) 985
---- ---
Net income (loss) $177 $(11,844)
==== ========
Earnings (loss) per share:
Basic
Diluted $- $(0.04)
$- $(0.04)
Shares used to compute earnings
(loss) per share:
Basic 274,877 273,320
Diluted 276,038 273,320
SONUS NETWORKS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December
June 30, 31,
2010 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $103,788 $125,323
Marketable securities 249,393 239,223
Accounts receivable, net 40,188 47,998
Inventory, net 21,181 21,925
Deferred income taxes 669 562
Other current assets 20,394 17,508
------ ------
Total current assets 435,613 452,539
Property and equipment, net 14,355 14,646
Intangible assets, net 2,065 341
Goodwill 5,053 5,053
Investments 66,474 49,598
Deferred income taxes 780 711
Other assets 22,623 17,849
------ ------
$546,963 $540,737
======== ========
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable $18,619 $5,337
Accrued expenses 17,584 19,292
Current portion of deferred
revenue 57,141 74,748
Current portion of long-term
liabilities 484 753
--- ---
Total current liabilities 93,828 100,130
Deferred revenue 31,703 25,242
Long-term liabilities 1,042 1,127
----- -----
Total liabilities 126,573 126,499
------- -------
Commitments and contingencies
Stockholders equity:
Common stock 278 277
Additional paid-in capital 1,292,492 1,286,326
Accumulated deficit (878,633) (878,810)
Accumulated other
comprehensive income 6,520 6,712
Treasury stock (267) (267)
---- ----
Total stockholders' equity 420,390 414,238
------- -------
$546,963 $540,737
======== ========
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six months ended
----------------
June 30, June 30,
2010 2009
---- ----
Cash flows from operating activities:
Net income (loss) $177 $(11,844)
Adjustments to reconcile net income
(loss) to cash flows provided by
operating activities:
Depreciation and amortization of property
and equipment 4,804 5,004
Amortization of intangible assets 276 153
Stock-based compensation 5,698 6,750
Loss on disposal of property and
equipment 59 15
Deferred income taxes - (208)
Changes in operating assets and
liabilities:
Accounts receivable 7,778 37,714
Inventory (5,201) (5,204)
Other operating assets 261 (13,472)
Accounts payable 12,989 1,204
Accrued expenses (1,828) (11,275)
Accrued litigation settlements - (100)
Deferred revenue (11,181) 3,645
------- -----
Net cash provided by operating activities 13,832 12,382
------ ------
Cash flows from investing activities:
Purchases of property and equipment (4,276) (3,352)
Purchase of intangible assets (2,000) -
Purchases of marketable securities (168,953) (61,926)
Sale/maturities of marketable
securities 139,620 153,738
Increase in litigation settlement escrow - (9,500)
--- ------
Net cash provided by (used in) investing
activities (35,609) 78,960
------- ------
Cash flows from financing activities:
Sale of common stock in connection with
employee stock purchase plan 609 529
Proceeds from exercise of stock options 61 1
Payment of tax withholding obligations
related to net share settlements of
restricted stock awards (257) (287)
Principal payments of capital lease
obligations (110) (124)
---- ----
Net cash provided by financing activities 303 119
--- ---
Effect of exchange rate changes on cash
and cash equivalents (61) 407
--- ---
Net increase (decrease) in cash and cash
equivalents (21,535) 91,868
Cash and cash equivalents, beginning of
year 125,323 122,207
------- -------
Cash and cash equivalents, end of period $103,788 $214,075
======== ========
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
------------------
June March June
30, 31, 30,
2010 2010 2009
---- ---- ----
Stock-based compensation
Cost of revenue - product $89 $71 $115
Cost of revenue - service 404 419 387
--- --- ---
Cost of revenue 493 490 502
--- --- ---
Research and development
expense 665 606 1,102
Sales and marketing expense 688 729 1,490
General and administrative
expense 1,366 661 616
----- --- ---
Operating expense 2,719 1,996 3,208
----- ----- -----
Total stock-based compensation $3,212 $2,486 $3,710
====== ====== ======
Amortization of intangible
assets
Cost of revenue - product $38 $38 $48
Research and development 100 100 -
--- --- ---
Total amortization of
intangible assets $138 $138 $48
==== ==== ===
Six months ended
----------------
June June
30, 30,
2010 2009
---- ----
Stock-based compensation
Cost of revenue - product $160 $231
Cost of revenue - service 823 852
--- ---
Cost of revenue 983 1,083
--- -----
Research and development
expense 1,271 1,869
Sales and marketing expense 1,417 2,534
General and administrative
expense 2,027 1,264
----- -----
Operating expense 4,715 5,667
----- -----
Total stock-based compensation $5,698 $6,750
====== ======
Amortization of intangible
assets
Cost of revenue - product $76 $144
Research and development 200 -
--- ---
Total amortization of
intangible assets $276 $144
==== ====
