EXHIBIT 99.1
TUT SYSTEMS, INC. REPORTS THIRD QUARTER 2003 RESULTS
Pleasanton, Calif., October 29, 2003 — Tut Systems, Inc. (Nasdaq: TUTS), today announced its results for the third quarter 2003. Revenue for the quarter ended September 30, 2003, was $8.5 million compared with revenue of $2.0 million for the quarter ended September 30, 2002. This represents a year-over-year increase in revenues of 319%. Revenue for the nine months ended September 30, 2003, was $23.0 million compared with $6.9 million for the nine months ended September 30, 2002. This represents a year-over-year increase in revenues of 233%. The increases are primarily attributable to the strategic acquisition of VideoTele.com in November 2002. Further, revenue of $8.5 million for the quarter ended September 30, 2003 represents an 8% increase over second quarter 2003 revenues of $7.9 million.
The net loss for the three and nine months ended September 30, 2003, was $(0.7) million or $(0.04) per basic and diluted share and $(5.0) million or $(0.25) per basic and diluted share, respectively. This compares with the net loss for the three and nine months ended September 30, 2002, of $(5.9) million or $(0.36) per basic and diluted share and $(24.6) million or $(1.50) per basic and diluted share, respectively.
Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the quarter ended September 30, 2003, improved by $4.9 million to $23 thousand, compared with a negative $4.9 million for the quarter ended September 30, 2002. EBITDA for the nine months ended September 30, 2003, improved by $18.9 million to a negative $2.8 million from a negative $21.7 million for the same period in 2002. The Company computes EBITDA, as reflected in the table appearing at the end of this press release, by adding net interest, depreciation and amortization expense to its GAAP reported net loss. (For a reconciliation of GAAP to non-GAAP figures, please see the accompanying table entitled “Third Quarter Fiscal Year 2003 GAAP to Non-GAAP Reconciliation.”)
Third Quarter Conference Call Information
Tut Systems will host a conference call to discuss third quarter results beginning today at 2:00 pm Pacific time. For callers within the United States, please dial 800-939-8871 atleast 5 minutes before start time or visithttp://www.tutsystems.com. International participants may dial 706-643-1559 or visithttp://www.tutsystems.com.
For callers within the United States accessing the conference call replay, please dial 800-642-1687, conference identification code, 3597971. International participants may dial +1-706-645-9291. The replay will be available athttp://www.tutsystems.com two hours after the call ends for at least one week.
Recent Announcements:
Significant announcements from Tut Systems since the second quarter earnings release include:
7/30/03 | Tut Systems and Siemens Partner to Win Portugal Telecom ConcePT Hotel Program | |
7/30/03 | Cameron and Wamego Using VideoTele.com’s IP TV Solution to Deliver Digital TV Services | |
7/30/03 | Duo County and Dumont Telephone to Offer Digital Tier Cable TV Service Using VideoTele.com Solution | |
9/9/03 | Hong Kong’s Leading Telecommunications Provider Selects VideoTele.com’s Astria(R) Digital TV Solution | |
9/23/03 | Tut Systems and Teleste Join to Offer Open Solutions for Advanced Broadcast TV and VOD Applications | |
10/2/03 | Tut Systems and RYCOM Partner to Deliver High-Performance Network Infrastructure for University of Toronto’s Student Housing | |
10/14/03 | VideoTele.com Announces First Customer for New M2-10 Video Transport Solution |
About Tut Systems, Inc.
Tut Systems, Inc. (NASDAQ: TUTS) delivers industry leading content processing and distribution products for deploying next-generation data and video services over broadband networks. Tut Systems products are used by telecommunications, cable, entertainment and communications companies, as well as government agencies from around the world, to enable the delivery of broadcast-quality video over any broadband network. VideoTele.com, a subsidiary of Tut Systems, is the world leader in delivering digital TV over xDSL networks.
Tut Systems is headquartered in Pleasanton, CA with administrative offices in Lake Oswego, OR and on the Internet at <http://www.tutsystems.com>. Tut Systems can be contacted at 925-460-3900, 503-594-1400 or 800-998-4888.
- FINANCIAL TABLES FOLLOW -
Contact:
Randy Gausman
Chief Financial Officer
Tut Systems
(503)-594-1400
RandallG@VideoTele.com
Jeff Schline
Manager, Corporate Communications
Tut Systems
(503) 594-1364
jschline@VideoTele.com
TUT SYSTEMS, INC.
THIRD QUARTER FISCAL YEAR 2003 GAAP TO NON-GAAP RECONCILIATION
(in thousands)
(unaudited)
Use of Non-GAAP Financial Measures
EBITDA is a financial measure that is not determined in accordance with generally accepted accounting principles (“GAAP”). EBITDA does not represent funds available for management’s discretionary use and is not intended to represent cash flow from operations. EBITDA should not be construed as a substitute for net loss or as a better measure of liquidity than cash flow from operating activities, both of which are determined in accordance with GAAP. EBITDA excludes components that are significant in understanding and assessing the Company’s results of operations and cash flows. In addition, EBITDA is not a term defined by GAAP and as a result, our measure of EBITDA might not be comparable to similarly titled measures used by other companies. The Company presents the reconciliation from net loss to EBITDA since the Company deems net loss the most directly comparable GAAP term.
However, the Company believes that EBITDA is relevant and useful information. Company management refers to EBITDA in making operating decisions because it provides meaningful supplemental information regarding the company’s operational performance. For instance, management believes that EBITDA is useful in assessing the Company’s core operating results and internal comparisons to the Company’s historical operating results. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of our operating performance, as an additional measure of performance and liquidity and to provide additional information with respect to the Company’s ability to meet future debt service, capital expenditures and working capital requirements.
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
Net loss | $ | (742 | ) | $ | (5,867 | ) | $ | (4,998 | ) | $ | (24,621 | ) | ||||
Depreciation | 297 | 813 | 796 | 2,599 | ||||||||||||
Amortization | 442 | 300 | 1,360 | 899 | ||||||||||||
Interest expense (income), net | 26 | (158 | ) | 28 | (599 | ) | ||||||||||
EBITDA | $ | 23 | $ | (4,912 | ) | $ | (2,814 | ) | $ | (21,722 | ) | |||||
TUT SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
Revenues: | ||||||||||||||||
Product | $ | 8,283 | $ | 1,840 | $ | 22,384 | $ | 6,317 | ||||||||
License and royalty | 239 | 195 | 604 | 590 | ||||||||||||
Total revenues | 8,522 | 2,035 | 22,988 | 6,907 | ||||||||||||
Cost of goods sold: | ||||||||||||||||
Product | 3,751 | 1,249 | 11,025 | 9,340 | ||||||||||||
Gross margin (loss) | 4,771 | 786 | 11,963 | (2,433 | ) | |||||||||||
56.0 | % | 38.6 | % | 52.0 | % | (35.2 | )% | |||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 1,848 | 1,830 | 5,702 | 6,612 | ||||||||||||
Research and development | 1,887 | 3,172 | 6,221 | 9,959 | ||||||||||||
General and administrative | 1,018 | 642 | 3,325 | 3,844 | ||||||||||||
Restructuring costs | 292 | 870 | 292 | 870 | ||||||||||||
Impairment of intangible assets | 128 | |||||||||||||||
Amortization of intangible assets | 442 | 300 | 1,360 | 899 | ||||||||||||
Total operating expenses | 5,487 | 6,814 | 17,028 | 22,184 | ||||||||||||
Loss from operations | (716 | ) | (6,028 | ) | (5,065 | ) | (24,617 | ) | ||||||||
Impairment of certain equity investments | (592 | ) | ||||||||||||||
Interest and other (expense) income, net | (26 | ) | 161 | 67 | 588 | |||||||||||
Net loss | $ | (742 | ) | $ | (5,867 | ) | $ | (4,998 | ) | $ | (24,621 | ) | ||||
Net loss per share, basic and diluted | $ | (0.04 | ) | $ | (0.36 | ) | $ | (0.25 | ) | $ | (1.50 | ) | ||||
Shares used in computing net loss, basic and diluted | 20,040 | 16,482 | 19,912 | 16,451 | ||||||||||||
TUT SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30, 2003 | December 31, 2002 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash, cash equivalents and short-term investments | $ | 13,956 | $ | 25,571 | ||
Accounts receivable, net | 7,187 | 1,972 | ||||
Inventories, net | 3,822 | 3,888 | ||||
Prepaid expenses and other | 1,517 | 1,082 | ||||
Total current assets | 26,482 | 32,513 | ||||
Property and equipment, net | 1,579 | 1,630 | ||||
Intangibles and other assets | 4,099 | 5,586 | ||||
Total assets | $ | 32,160 | $ | 39,729 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | $ | 4,575 | $ | 7,196 | ||
Deferred revenue | 170 | 921 | ||||
Total current liabilities | 4,745 | 8,117 | ||||
Deferred revenue, net of current portion | 35 | |||||
Other liabilities | 3,511 | 3,346 | ||||
Total liabilities | 8,256 | 11,498 | ||||
Stockholders’ equity | 23,904 | 28,231 | ||||
Total liabilities and stockholders’ equity | $ | 32,160 | $ | 39,729 | ||