Sonus Networks Reports Third Quarter 2009 Financial Results
- Press Release
- Source: Sonus Networks, Inc.
- On 4:05 pm EST, Thursday November 5, 2009
WESTFORD, Mass., Nov. 5 /PRNewswire-FirstCall/ -- Sonus Networks, Inc. (Nasdaq: SONS - News), providing network transformation through IP communications technology, today announced results for the third quarter ended September 30, 2009.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| SONS | 2.13 | +0.01 |
Revenue for the third quarter of fiscal 2009 was $56.2 million, compared to $61.6 million in the second quarter of fiscal 2009 and revenue from continuing operations of $62.2 million for the third quarter of fiscal 2008. The Company's net loss on a GAAP basis was $3.4 million, or $0.01 per share, for the third quarter of 2009, compared to net income of $4.4 million, or $0.02 per diluted share, for the second quarter of 2009, and a loss from continuing operations of $20.7 million, or $0.08 per share, for the third quarter of 2008. The Company ended the quarter with cash, cash equivalents, marketable securities and investments totaling $394.2 million.
"During the third quarter we completed our restructuring initiatives which started in the second half of 2008," said Richard Nottenburg, president and chief executive officer of Sonus Networks. "We continue to focus on investing in new products and service offerings bringing innovative solutions to the market."
Conference Call Details:
Date: Monday, November 9, 2009.
Time: 4:15 p.m. ET.
To listen live via telephone:
Dial-in number: 800-734-8583
International Callers: +1 212-231-2906
To listen via internet:
Sonus will host a live webcast of the conference call. To access the webcast, visit www.sonusnet.com, About Us, Investor Relations.
Replay:
A telephone playback of the call will be available following the conference and can be accessed by calling 800-633-8284 or for international callers, please call +1 402-977-9140. The reservation number for the replay is 21441087 and will be available until November 23, 2009.
A replay of the webcast will be also available on the Sonus Networks Investor Relations website. To access the replay of the webcast, visit www.sonusnet.com, About Us, Investor Relations, Webcast Archive.
About Sonus Networks
Sonus Networks, Inc., providing network transformation through IP communications technology, is leading the evolution of communications networks to support the multi-device demands of today's digital lifestyle. Sonus solutions and services enable fixed, mobile and cable operators to gain network awareness and new multi-media capabilities essential to retaining and expanding their subscriber base. Through standards-based interoperable solutions and services, Sonus extends the investments made in traditional networks by enabling operators to seamlessly migrate to next generation technology and deliver the secure, reliable, scalable and cost-effective network needed to grow their business. 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. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009. Risk factors include, among others: our ability to align our cost structure with market conditions, our internal control over financial reporting and 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 previous restatement of its historical stock option granting practices and accounting, including regulatory actions; actions that may be taken by significant shareholders; risks associated with the right-sizing and re-alignment of our business; and the impact the current global financial market conditions may have on the telecommunications industry. 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:
Lucy Millington Beth Panfil
978-614-8240 978-614-8034
lmillington@sonusnet.com bpanfil@sonusnet.com
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three months ended
------------------
September 30, June 30, September 30,
2009 2009 2008
---- ---- ----
Revenue:
Product $33,544 $36,320 $36,710
Service 22,621 25,287 25,474
------ ------ ------
Total revenue 56,165 61,607 62,184
------ ------ ------
Cost of revenue:
Product 10,160 10,747 11,643
Service 10,755 10,568 11,524
------ ------ ------
Total cost of revenue 20,915 21,315 23,167
------ ------ ------
Gross profit 35,250 40,292 39,017
------ ------ ------
Gross profit %
Product 69.7% 70.4% 68.3%
Service 52.5% 58.2% 54.8%
Total gross profit % 62.8% 65.4% 62.7%
Operating expenses:
Research and development 14,141 15,501 18,240
Sales and marketing 11,527 12,344 17,520
General and
administrative 11,578 10,186 21,631
Litigation settlements - - 19,100
Restructuring 1,533 (7) -
----- --- ---
Total operating
expenses 38,779 38,024 76,491
------ ------ ------
Income (loss) from
operations (3,529) 2,268 (37,474)
Interest expense (23) 8 (204)
Interest income 787 1,077 2,897
Other income, net 12 19 2
--- --- ---
Income (loss) from
continuing operations
before income taxes (2,753) 3,372 (34,779)
Income tax (provision)
benefit (644) 1,011 14,096
------ ------ ------
Income (loss) from
continuing operations (3,397) 4,383 (20,683)
Loss from discontinued
operations, net of tax - - (563)
------ ------ ------
Net income (loss) $(3,397) $4,383 $(21,246)
======= ====== ========
Earnings (loss) per share:
Basic
Continuing operations $(0.01) $0.02 $(0.08)
Discontinued
operations - - -
------ ------ ------
$(0.01) $0.02 $(0.08)
====== ===== ======
Diluted
Continuing operations $(0.01) $0.02 $(0.08)
Discontinued
operations - - -
------ ------ ------
$(0.01) $0.02 $(0.08)
====== ===== ======
Shares used to compute earnings
(loss) per share:
Basic 273,907 273,543 271,619
Diluted 273,907 273,768 271,619
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Nine months ended
-----------------
September 30, September 30,
2009 2008
------ ------
Revenue:
Product $89,267 $149,745
Service 69,517 73,856
------ ------
Total revenue 158,784 223,601
------- -------
Cost of revenue:
Product 27,041 46,643
Service 32,986 33,919
------ ------
Total cost of revenue 60,027 80,562
------ ------
Gross profit 98,757 143,039
------ -------
Gross profit %
Product 69.7% 68.9%
Service 52.6% 54.1%
Total gross profit % 62.2% 64.0%
Operating expenses:
Research and development 45,995 57,101
Sales and marketing 36,018 55,412
General and
administrative 32,259 44,660
Litigation settlements - 19,100
Restructuring 3,510 -
------ ------
Total operating
expenses 117,782 176,273
------- -------
Loss from operations (19,025) (33,234)
Interest expense (94) (257)
Interest income 3,513 10,097
Other income, net 24 387
------ ------
Loss from continuing
operations before income
taxes (15,582) (23,007)
Income tax benefit 341 6,365
------ ------
Loss from continuing
operations (15,241) (16,642)
Loss from discontinued
operations, net of tax - (4,308)
------ ------
Net loss $(15,241) $(20,950)
======== ========
Loss per share:
Basic
Continuing operations $(0.06) $(0.06)
Discontinued
operations - (0.02)
------ ------
$(0.06) $(0.08)
====== ======
Diluted
Continuing operations $(0.06) $(0.06)
Discontinued
operations - (0.02)
------ ------
$(0.06) $(0.08)
====== ======
Shares used to compute loss
per share:
Basic 273,518 271,121
Diluted 273,518 271,121
SONUS NETWORKS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, December 31,
2009 2008
------ -----
Assets
Current assets:
Cash and cash equivalents $178,905 $122,207
Marketable securities 158,771 180,786
Accounts receivable, net 34,054 75,788
Inventory, net 22,183 22,553
Deferred income taxes 223 111
Other current assets 16,379 14,937
------ ------
Total current assets 410,515 416,382
Property and equipment, net 15,451 17,852
Intangible assets, net 379 568
Goodwill 5,046 5,025
Investments 56,521 84,965
Deferred income taxes 1,756 1,611
Other assets 18,969 9,182
------ -----
$508,637 $535,585
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $6,300 $9,200
Accrued expenses 15,718 28,231
Accrued litigation settlements - 9,600
Current portion of deferred revenue 52,888 40,962
Current portion of long-term
liabilities 977 1,301
------ -----
Total current liabilities 75,883 89,294
Deferred revenue 30,545 37,991
Long-term liabilities 1,214 1,865
----- -----
Total liabilities 107,642 129,150
------- -------
Commitments and contingencies
Stockholders equity:
Common stock 277 275
Additional paid-in capital 1,283,570 1,272,952
Accumulated deficit (889,119) (873,878)
Accumulated other comprehensive
income 6,534 7,353
Treasury stock (267) (267)
------ -----
Total stockholders' equity 400,995 406,435
------- -------
$508,637 $535,585
======== ========
SONUS NETWORKS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine months ended
September 30,
-----------------
2009 2008
---- ----
Cash flows from operating activities:
Net loss $(15,241) $(20,950)
Adjustments to reconcile net loss to cash flows
provided by (used in) operating activities:
Depreciation and amortization of property and
equipment 7,497 9,273
Amortization of intangible assets 184 852
Stock-based compensation 9,889 19,544
Impairment of intangible assets and goodwill - 3,630
Loss on disposal of property and equipment 173 157
Deferred income taxes (137) (6,896)
Changes in operating assets and liabilities:
Accounts receivable 41,600 42,631
Inventory (4,217) (7,828)
Insurance receivable - litigation settlement - 15,328
Other operating assets (7,516) 3,189
Accounts payable (3,212) (4,107)
Accrued expenses and deferred rent (12,999) (16,016)
Litigation settlement liability (9,600) (30,400)
Deferred revenue 4,240 (11,350)
----- -------
Net cash provided by (used in) operating
activities 10,661 (2,943)
------ ------
Cash flows from investing activities:
Purchases of property and equipment (4,813) (6,968)
Business acquisition, net of cash acquired - (4,909)
Purchases of marketable securities (179,416) (280,717)
Sale/maturities of marketable securities 228,979 262,040
Decrease in litigation settlement escrow - 25,000
------ ------
Net cash provided by (used in) investing
activities 44,750 (5,554)
------ ------
Cash flows from financing activities:
Sale of common stock in connection with employee
stock purchase plan 1,119 3,756
Proceeds from exercise of stock options 32 425
Payment of tax withholding obligations related to
net share settlements of restricted stock awards (531) (1,236)
Principal payments of capital lease obligations (189) (166)
---- ----
Net cash provided by financing activities 431 2,779
--- -----
Effect of exchange rate changes on cash and cash
equivalents 856 (83)
--- ---
Net increase (decrease) in cash and cash equivalents 56,698 (5,801)
Cash and cash equivalents, beginning of period 122,207 118,933
------- -------
Cash and cash equivalents, end of period $178,905 $113,132
======== ========
SONUS NETWORKS, INC.
Supplemental Information
(In thousands)
(unaudited)
The following tables provide the details of stock-based compensation,
amortization of intangible assets, an earnout settlement related to our
Zynetix acquisition and a change in estimate of a loss contingency related
to an employment tax audit 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 Corporate page 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 Nine months ended
------------------ -----------------
Sept. June Sept. Sept. Sept.
30, 30, 30, 30, 30,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Stock-based compensation
Cost of revenue - product $67 $115 $195 $298 $583
Cost of revenue - service 483 387 554 1,335 2,266
--- --- --- ----- -----
Cost of revenue 550 502 749 1,633 2,849
--- --- --- ----- -----
Research and development
expense 774 1,102 1,373 2,643 6,708
Sales and marketing expense 885 1,490 987 3,419 4,168
General and administrative
expense 930 616 2,347 2,194 5,679
--- --- ----- ----- -----
Operating expense 2,589 3,208 4,707 8,256 16,555
----- ----- ----- ----- ------
Total stock-based
compensation $3,139 $3,710 $5,456 $9,889 $19,404
====== ====== ====== ====== =======
Amortization of intangible assets
Cost of revenue - product $40 $48 $263 $184 $573
Sales and marketing expense - - 55 - 117
----- ----- ----- ----- ------
Total amortization of
intangible assets $40 $48 $318 $184 $690
=== === ==== ==== ====
Earnout settlement - Zynetix
General and administrative
expense $- $- $1,685 $- $1,685
=== === ====== === ======
Change in estimate - reduction
of loss contingency related to
employment tax audit (1)
Cost of revenue - product $- $- $- $- $(7)
--- --- --- --- ---
Research and development
expense - - - - (51)
Sales and marketing expense - - - - (96)
General and administrative
expense - - - - (387)
--- --- --- --- ----
Operating expense - - - - (534)
--- --- --- --- ----
Other income (expense) - - - - 379
--- --- --- --- ----
Total change in estimate
- reduction of loss
contingency related to
employment tax audit $- $- $- $- $(920)
=== === === === =====
(1) Change in estimate resulting in a reduction of the loss contingency
related to the settlement of an employment tax audit by the Internal
Revenue Service that had resulted from the stock option review and
subsequent restatement.
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