EXHIBIT 99.1
Avanex Announces Revenues of $30.3 Million; $19.8 Million Year-to-Year Revenue Growth
FREMONT, Calif., April 24 /PRNewswire Interactive News Release/ --
Avanex Corporation (Nasdaq: AVNX), pioneer of photonic processors that accelerate the deployment of the next generation optical networks, today reported third quarter results for its fiscal year 2001, which ended March 31, 2001.
Avanex Chairman and Chief Executive Officer Walter Alessandrini said, "It's clear that the telecommunications retrenchment has affected everyone in this industry. We have addressed this by restructuring our operations. Our strategy has been to maximize our flexibility while increasing our technology advantage and lowering our imbedded costs. We therefore continue to invest strongly in research and development, application engineering and product marketing so that we can take full advantage of the upswing in the industry when it takes place."
The Avanex Chairman pointed out that March quarter revenues increased $19.8 million compared to the same quarter of last year. "We successfully added several new customers and increased our product offerings during this past quarter. Our March quarter revenue from next generation products, which include PowerMux(TM) and PowerExchanger(TM), grew significantly, and we expect further success this year for these products," said Alessandrini.
Alessandrini added that the company reduced its workforce by 350 in the March quarter, mostly in manufacturing, "to assure that our production capacity is aligned with our current market expectations."
Financial Results
Avanex's net revenues for the quarter ending March 31, 2001 were $30.3 million, an increase of $19.8 million over the Company's revenues of $10.5 million for the third quarter of fiscal 2000 ended March 31, 2000. The Company reported revenues of $47.9 million in the second fiscal quarter ended December 31, 2000.
Pro forma net loss for the quarter was $1.6 million, or $0.03 per share excluding charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, and stock accretion. This compared with a pro forma net income of $4.1 million, or $0.06 per share in the second quarter of fiscal 2001 ended December 31, 2000. Pro forma net loss for the prior year's third quarter was $2.9 million, or $0.08 per share.
Net loss for the quarter including charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, and stock accretion was $36.4 million, or $0.62 per share compared to a net loss of $29.2 million or $0.85 per share for the same period in the prior year. A provision for excess inventory of $21.6 million was recorded due to the substantial and unexpected drop in customer demand the Company experienced. This provision consists of a $11.4 million reserve against current inventory and a $10.2 million accrual for non-cancelable purchase commitments. Net loss was $11.3 million or $0.20 per share loss in the second fiscal quarter ended December 31, 2000.
Net revenues for the nine months ended March 31, 2001 were $113.0 million, compared with $21.4 million for the same period of fiscal 2000. Pro forma net income for the nine months ended March 31, 2001, excluding charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, in-process research and development charge and stock accretion, was $4.8 million, or $0.07 per share, compared with pro forma net loss of $7.0 million, or $0.45 per share, in the same period of fiscal 2000. Net loss for the nine months ended March 31, 2001, including the above-mentioned charges, was $73.0 million, or $1.28 per share, compared with $69.0 million, or $4.45 per share, in the same period of fiscal 2000.
As the Company announced earlier this month, management is implementing a cost containment plan in the fourth fiscal quarter and expects to take a restructuring charge of approximately $18 million to $24 million during the fourth quarter. The restructuring charge will include costs related to a reduction in workforce and a provision for excess facilities and assets.
Outlook
The Company updated its revenue and EPS outlook for the fourth fiscal quarter and calendar year 2001. Avanex expects fourth fiscal quarter revenues to be approximately $25 million, and calendar year 2001 revenues to range between $110 million and $115 million. The Company expects EPS for the fourth fiscal quarter to range between a loss per share of two cents and a loss per share of three cents. For the calendar year 2001, Avanex expects EPS to range between a loss per share of eight cents and a loss per share of ten cents, excluding charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, and the Company's expected fourth quarter restructuring charge.
Conference Call
Avanex will discuss its revised guidance on a conference call scheduled today, April 24, at 4:30 p.m. EDT. The number for the conference call is 888-316-9406. The password is "Photonics." A replay of the conference call will be available through May 1, 2001, at 800-435-3142.
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. In addition to a development and manufacturing facility in Fremont, the Company also maintains The Photonics Center(TM) in Richardson, Texas.
Forward-looking Statements
This press release contains forward-looking statements including forward- looking statements regarding revenues and earnings the Company expects to report for the fourth quarter of fiscal year 2001 and for calendar year 2001, a charge for restructuring costs in the fourth quarter of 2001, demand for the Company's products, including the Company's newest products and next- generation products, and the Company's ability to achieve anticipated cost reductions. Actual results could differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ include any accounting adjustments made during the close of the Company's quarter, 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, higher than anticipated expenses the Company may incur in future quarters or the inability to identify expenses which can be eliminated. In addition, please refer to the risk factors contained in the Company's SEC filings including its most recently 10-Q filed with the SEC on February 15, 2001.
Avanex undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Contact Information:
| Media | Investor Relations |
| Tony Florence Phone: 510-897-4162 Fax: 510-979-0198 email: tony_florence@avanex.com | Investor Relations Mark Weinswig Phone: 510-897-4344 Fax: 510-897-4345 email: mark_weinswig@avanex.com |
AVANEX CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
Net revenue.................... $30,311 $10,505 $113,026 $21,421
Cost of revenue................ 39,775 6,781 84,335 14,975
------------ ------------ ------------ ------------
Gross profit (loss)............ (9,464) 3,724 28,691 6,446
Operating expenses:
Research and development..... 11,064 5,018 29,932 8,006
Sales and marketing.......... 4,083 2,054 12,806 3,730
General and administrative... 3,275 1,482 9,990 3,611
Stock compensation........... 10,563 8,585 44,495 24,282
In-process research and
development............... -- -- 4,700 --
Amortization of intangibles.. 2,619 -- 7,036 --
------------ ------------ ------------ ------------
Total operating expenses... 31,604 17,139 108,959 39,629
------------ ------------ ------------ ------------
Loss from operations........... (41,068) (13,415) (80,268) (33,183)
Other income, net.............. 3,553 1,950 10,477 1,924
------------ ------------ ------------ ------------
Net loss before tax............ (37,515) (11,465) (69,791) (31,259)
Income tax expense (recovery).. (1,101) -- 3,209 --
------------ ------------ ------------ ------------
Net loss....................... (36,414) (11,465) (73,000) (31,259)
Stock accretion................ -- (17,692) -- (37,743)
------------ ------------ ------------ ------------
Net loss attributable to
common stockholders.......... ($36,414) ($29,157) ($73,000) ($69,002)
============ ============ ============ ============
Basic and diluted net loss
per common share............. ($0.62) ($0.85) ($1.28) ($4.45)
============ ============ ============ ============
Weighted-average shares
used in computing basic
and diluted net loss per
common share................. 58,607 34,129 56,849 15,503
============ ============ ============ ============
AVANEX CORPORATION
Proforma Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
----------------------- -----------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Net revenue..................... $30,311 $10,505 $113,026 $21,421
Cost of revenue................. 18,184 6,781 62,744 14,975
----------- ----------- ----------- -----------
Gross profit .................. 12,127 3,724 50,282 6,446
Operating expenses:
Research and development...... 11,064 5,018 29,932 8,006
Sales and marketing........... 4,083 2,054 12,806 3,730
General and administrative.... 3,275 1,482 9,990 3,611
----------- ----------- ----------- -----------
Total operating expenses.... 18,422 8,554 52,728 15,347
----------- ----------- ----------- -----------
Loss from operations............ (6,295) (4,830) (2,446) (8,901)
Other income, net............... 3,553 1,950 10,477 1,924
----------- ----------- ----------- -----------
Net income (loss) before tax.... (2,742) (2,880) 8,031 (6,977)
Income tax expense (recovery)... (1,101) -- 3,209 --
----------- ----------- ----------- -----------
Net income (loss)............... ($1,641) ($2,880) $4,822 ($6,977)
=========== =========== =========== ===========
Basic and diluted net income
(loss) per common share....... ($0.03) ($0.08) $0.07 ($0.45)
=========== =========== =========== ===========
Weighted-average shares
used in computing basic
and diluted net income
(loss) per common share....... 58,607 34,129 68,132 15,503
=========== =========== =========== ===========
Note: The Proforma Condensed Consolidated Statements of Operations exclude the
impact of the in-process research and development write-off, inventory provision,
amortization of deferred stock compensation, amortization of intangibles and
stock accretion.
AVANEX CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, June 30,
2001 2000
------------ ------------
ASSETS
Current assets:
Cash, cash equivalents and short-term investments.... $213,798 $184,321
Accounts receivable, net............................. 28,559 9,942
Inventories.......................................... 22,474 8,266
Other current assets................................. 2,269 1,922
------------ ------------
Total current assets............................... 267,100 204,451
Property and equipment, net............................ 41,417 14,990
Intangible assets.................................... 45,343 --
Long-term investments.................................. 13,227 56,943
Other assets........................................... 520 1,757
------------ ------------
Total assets................................... $367,607 $278,141
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings................................ 10,201 $1,525
Accounts payable..................................... 18,793 7,668
Accrued compensation and related expenses............ 6,355 2,999
Noncancelable purchase commitments .................. 10,215 --
Other accrued expenses............................... 18,143 5,939
Current portion of capital lease obligations......... 2,808 786
------------ ------------
Total current liabilities.......................... 66,515 18,917
Capital lease obligations.............................. 15,497 2,067
Stockholders' equity .................................. 285,595 257,157
------------ ------------
Total liabilities and stockholders'
equity....................................... $367,607 $278,141
============ ============
NOTE: The Company maintains its financial records on the basis of a fiscal year
ending June 30, with fiscal quarters ending on the Friday closest to the end of
the period (thirteen-week periods). For ease of reference, all references to
period end dates have been presented as though the period ended on the last
day of the calender month. The third quarter of fiscal 2001 and 2000 ended
on March 30, 2001 and March 31, 2000, respectively. 