Exhibit 99.1
www.avanex.com
For immediate release
Avanex announces quarterly revenue of $5.4 million and Improved Operating Performance
FREMONT, Calif. (April 30, 2003)—Avanex Corporation (Nasdaq: AVNX), pioneer of intelligent optical solutions that enable next-generation optical networks, today reported results for its third fiscal quarter, which ended March 31, 2003.
Net revenues for the quarter ended March 31, 2003 were $5.4 million, an increase of $0.1 million over the company’s revenues of $5.3 million for the prior quarter ended December 31, 2002. Net revenue for the quarter ended March 31, 2003 decreased $4.8 million from $10.2 million in the prior year quarter ended March 31, 2002. The company reported a net loss of $10.4 million, or $0.15 per share, for the quarter ended March 31, 2003, compared to a net loss of $15.9 million, or $0.23 per share, for the quarter ended December 31, 2002 and a net loss of $30.1 million, or $0.45 per share, for the quarter ended March 31, 2002.
Walter Alessandrini, Chairman, President and Chief Executive Officer of Avanex, commented, “It is clear to us that this industry has great potential for long term growth. In anticipation of the inevitable upswing, and in order to be in a strong position to maximize our opportunities going forward, during the latest quarter we continued to develop new products, expanded our customer list, and transitioned more manufacturing offshore.”
“In the March quarter, we further reduced operating expenses and improved our bottom line results from the previous quarter through the aggressive implementation of cost saving initiatives,” noted Alessandrini. “We remain committed to drive down costs through increased use of contract manufacturing and the realization of internal synergies.”
“In terms of our product strategy and vision, we are focusing on developing integrated subsystems for our customers. These products move us up the value chain and improve our competitive position in the marketplace. We expect our portfolio of optical subsystem products and solutions to become a greater part of our business as we evolve our product focus into increasingly integrated solutions.”
Alessandrini concluded, “Avanex has successful product lines, a broader suite of intelligent photonic solutions, and strong customer relationships with leading systems integrators and service providers. In addition, the company has a solid financial position with over $143 million in cash and investments. We believe these assets put us in a leading position going forward to become a stronger contributor to helping system integrators and carriers reach their goals to unleash the power of the optical layer in telecommunications.”
Corporate Headquarters
40919 Encyclopedia Circle, Fremont, CA 94538 USA • Telephone 510-897-4188 Fax 510-897-4189
Conference Call
Avanex will host a conference call today, April 30, 2003, at 4:30 p.m. EDT. The number for the conference call is 888-396-9923. The password is “Photonics.” A replay of the conference call will be available through May 7, 2003, at 402-998-0532.
About Avanex
Avanex designs, manufactures and markets photonic processors for the communications industry. Avanex’s photonic processors offer communications service providers and optical systems manufacturers greater levels of performance and miniaturization, reduced complexity and increased cost-effectiveness as compared to current alternatives.
Avanex was incorporated in 1997 and is headquartered in Fremont, Calif. To learn more about Avanex, visit our Web site at: www.avanex.com.
Forward-looking Statements
This press release contains forward-looking statements including forward-looking statements regarding cost reduction measures, new product and technology initiatives, new project designs, our competitive position, and prevailing and anticipated improvements in market conditions. Actual results could differ materially from those projected in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include general economic conditions, the pace of spending and timing of economic recovery in the telecommunications industry and in particular the optical networks industry, the Company’s inability to sufficiently anticipate market needs and develop products and product enhancements that achieve market acceptance, any slowdown or deferral of new orders for our products, higher than anticipated expenses the Company may incur in future quarters or the inability to identify expenses which can be eliminated, and the impact of the Company’s restructuring on its ability to achieve increased efficiencies in its operations. In addition, please refer to the risk factors contained in the Company’s SEC filings including the Company’s Quarterly Report on Form 10-Q filed with the SEC on February 7, 2003.
Avanex assumes no obligation and does not intend to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact Information:
Investor Relations Mark Weinswig Phone: 510-897-4344 Fax: 510-897-4345 e-mail:mark_weinswig@avanex.com | | Media Tony Florence Phone: 510-897-4162 Fax: 510-979-0198 e-mail:tony_florence@avanex.com |
AVANEX CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| | | Three Months Ended March 31,
| | | Nine Months Ended March 31,
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| | | 2003
| | | 2002
| | | 2003
| | | 2002
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Net revenue | | $ | 5,400 | | | $ | 10,185 | | | $ | 15,952 | | | $ | 25,660 | |
Cost of revenue | | | 6,698 | | | | 7,182 | | | | 24,005 | | | | 21,614 | |
Stock compensation expense (recovery) | | | 13 | | | | 137 | | | | (207 | ) | | | 21 | |
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Gross profit (loss) | | | (1,311 | ) | | | 2,866 | | | | (7,846 | ) | | | 4,025 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Research and development | | | 3,031 | | | | 6,087 | | | | 13,104 | | | | 17,819 | |
Sales and marketing | | | 1,859 | | | | 1,698 | | | | 4,673 | | | | 4,729 | |
General and administrative | | | 2,445 | | | | 2,151 | | | | 7,196 | | | | 5,660 | |
Stock compensation expense (recovery) | | | (2,358 | ) | | | 4,194 | | | | (444 | ) | | | 14,789 | |
Acquired in-process research and development | | | — | | | | — | | | | — | | | | 5,445 | |
Amortization of intangibles | | | — | | | | 2,632 | | | | 200 | | | | 7,870 | |
Reduction in long-lived assets | | | — | | | | — | | | | 1,548 | | | | — | |
Restructuring charges | | | 4,750 | | | | 17,116 | | | | 22,482 | | | | 16,665 | |
Merger cost | | | — | | | | — | | | | 4,126 | | | | — | |
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Total operating expenses | | | 9,727 | | | | 33,878 | | | | 52,885 | | | | 72,977 | |
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Loss from operations | | | (11,038 | ) | | | (31,012 | ) | | | (60,731 | ) | | | (68,952 | ) |
Other income, net | | | 635 | | | | 896 | | | | 1,925 | | | | 3,700 | |
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Loss before cumulative effect of an accounting change | | | (10,403 | ) | | | (30,116 | ) | | | (58,806 | ) | | | (65,252 | ) |
Cumulative effect of an accounting change to adopt SFAS 142 | | | — | | | | — | | | | (37,500 | ) | | | — | |
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Net loss | | $ | (10,403 | ) | | $ | (30,116 | ) | | $ | (96,306 | ) | | $ | (65,252 | ) |
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Loss per share before cumulative effect of an accounting change | | $ | (0.15 | ) | | $ | (0.45 | ) | | $ | (0.86 | ) | | $ | (1.02 | ) |
Cumulative per share effect of an accounting change to adopt SFAS 142 | | | — | | | | — | | | | (0.55 | ) | | | — | |
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Basic and diluted net loss per common share | | $ | (0.15 | ) | | $ | (0.45 | ) | | $ | (1.41 | ) | | $ | (1.02 | ) |
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Weighted average shares used in computing basic and diluted net loss per common share | | | 68,840 | | | | 66,583 | | | | 68,121 | | | | 63,863 | |
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Calculation of net loss excluding certain items: | | | | | | | | | | | | | | | | |
Net loss per above | | $ | (10,403 | ) | | $ | (30,116 | ) | | $ | (96,306 | ) | | $ | (65,252 | ) |
Cost of revenue items: | | | | | | | | | | | | | | | | |
Provision for excess inventory | | | 290 | | | | 1,028 | | | | 4,142 | | | | 3,943 | |
Settlement of non-cancelable purchase commitment | | | — | | | | — | | | | — | | | | (590 | ) |
Utilization of excess inventory previously written off | | | (1,066 | ) | | | (2,186 | ) | | | (2,998 | ) | | | (3,446 | ) |
Stock compensation expense (recovery) | | | 13 | | | | 137 | | | | (207 | ) | | | 21 | |
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| | | | (763 | ) | | | (1,021 | ) | | | 937 | | | | (72 | ) |
Other items: | | | | | | | | | | | | | | | | |
Stock compensation expense (recovery) | | | (2,358 | ) | | | 4,194 | | | | (444 | ) | | | 14,789 | |
Acquired in-process research and development | | | — | | | | — | | | | — | | | | 5,445 | |
Amortization of intangibles | | | — | | | | 2,632 | | | | 200 | | | | 7,870 | |
Reduction in long-lived assets | | | — | | | | — | | | | 1,548 | | | | — | |
Merger cost | | | — | | | | — | | | | 4,126 | | | | — | |
Utilization in R&D of excess inventory previously written off | | | (91 | ) | | | (292 | ) | | | (207 | ) | | | (292 | ) |
Restructuring charges | | | 4,750 | | | | 17,116 | | | | 22,482 | | | | 16,665 | |
Cumulative effect of an accounting change to adopt SFAS 142 | | | — | | | | — | | | | 37,500 | | | | — | |
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| | | | 2,301 | | | | 23,650 | | | | 65,205 | | | | 44,477 | |
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Net loss excluding certain items | | $ | (8,865 | ) | | $ | (7,487 | ) | | $ | (30,164 | ) | | $ | (20,847 | ) |
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Basic and diluted net loss per common share | | $ | (0.13 | ) | | $ | (0.11 | ) | | $ | (0.44 | ) | | $ | (0.33 | ) |
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AVANEX CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| | | March 31, 2003
| | | June 30, 2002
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Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 30,675 | | | $ | 29,739 | |
Short-term investments | | | 71,700 | | | | 106,346 | |
Accounts receivable, net | | | 1,892 | | | | 4,855 | |
Inventories | | | 3,980 | | | | 6,515 | |
Other current assets | | | 1,179 | | | | 801 | |
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Total current assets | | | 109,426 | | | | 148,256 | |
Long-term investments | | | 41,353 | | | | 40,984 | |
Property and equipment, net | | | 7,535 | | | | 18,872 | |
Intangibles, net | | | — | | | | 1,477 | |
Goodwill | | | — | | | | 37,500 | |
Other assets | | | 593 | | | | 3,308 | |
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Total assets | | $ | 158,907 | | | $ | 250,397 | |
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Liabilities and stockholders’ equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Short-term borrowings | | $ | 2,842 | | | $ | 6,035 | |
Accounts payable | | | 3,590 | | | | 2,539 | |
Current portion of restructuring accruals | | | 6,380 | | | | 4,349 | |
Other accrued expenses | | | 2,338 | | | | 4,618 | |
Warranty | | | 3,304 | | | | 3,842 | |
Current portion of long-term obligations | | | 4,469 | | | | 5,020 | |
Accrued compensation and related expenses | | | 2,418 | | | | 2,942 | |
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Total current liabilities | | | 25,341 | | | | 29,345 | |
Restructuring accruals | | | 27,972 | | | | 16,689 | |
Long-term obligations | | | 3,265 | | | | 6,365 | |
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Total liabilities | | | 56,578 | | | | 52,399 | |
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Stockholders’ equity: | | | | | | | | |
Common stock | | | 69 | | | | 69 | |
Additional paid-in capital | | | 483,846 | | | | 495,288 | |
Notes receivable from stockholders | | | — | | | | (1,265 | ) |
Deferred compensation | | | (1,185 | ) | | | (11,999 | ) |
Accumulated deficit | | | (380,401 | ) | | | (284,095 | ) |
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Total stockholders’ equity | | | 102,329 | | | | 197,998 | |
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Total liabilities and stockholders’ equity | | $ | 158,907 | | | $ | 250,397 | |
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