Exhibit 99.1
[TOLLGRADE LOGO]
[LETTERHEAD]
Contact: Richard Skaare Dick Muldoon
412-820-1347 Lucent INS
rskaare@tollgrade.com 908-559-6536
rpmuldoon@lucent.com
TOLLGRADE TO ACQUIRE LUCENT TECHNOLOGIES' MLT/LOOPCARE SOFTWARE
ASSETS FOR APPROXIMATELY $60 MILLION
Acquisition Transforms Tollgrade into Full-Product,
Hardware/Software Test System Provider
PITTSBURGH, PA, September 28, 2001 -- Tollgrade Communications, Inc. (NASDAQ:
TLGD) today announced that it has agreed to acquire the software assets of the
MLT/LoopCare test system business from Lucent Technologies for approximately $60
million in cash. Closing of the acquisition is expected to occur on September
30, 2001.
LoopCare, also known as Mechanized Loop Testing (MLT), is the Plain Old
Telephone Services (POTS) test system used universally by the Regional Bell
Operating Companies (RBOCs). Tollgrade intends to combine the LoopCare software
with Tollgrade's DigiTest(R) hardware to create a complete solution for testing
today's POTS services. The LoopCare-DigiTest combination also provides an
economical path to support the emerging needs of the digital consumer.
Lucent and Tollgrade have also entered into a supply agreement to
provide LoopCare solutions for the Digital Subscriber Line (DSL) and AnyMedia
market.
"This acquisition establishes Tollgrade in the preeminent position
among POTS test system companies," said Tollgrade Chairman and CEO Chris
Allison. "We're growing up from a niche player to an integrated, full-service
provider."
Tollgrade and Lucent have worked together since 1998 under a multi-year
product development, license, and authorized reseller agreement related to
LoopCare and DigiTest. Because the DigiTest hardware is currently interoperable
with the LoopCare software, Tollgrade's complete POTS and DSL test system is
immediately available for deployment.
Added Allison, "Tollgrade can now offer a much stronger value
proposition to Tollgrade and LoopCare customers when it comes to hardware and
software testing products. We want to provide not only world-class POTS and
consumer-oriented DSL testing capabilities, but evolve LoopCare/MLT so that we
can address new challenges, such as digital voice testing. Merging Tollgrade's
reputation for strong customer service and value-driven pricing with the
innovation and testing expertise of our new staff of former Bell Labs developers
creates a very compelling system offering. We'll help our RBOC customers take
care of traditional POTS testing needs through modernization so that they are
ready to solve new network problems. And we'll market our combined system both
domestically and internationally with an open-minded partnership approach
directed toward not only customers and transmission system partners but even
companies once thought to be our competitors."
There are currently about 32 employees working in Lucent's LoopCare
business. Tollgrade intends to move the group to a facility near the current
Liberty Corner, NJ, location by the end of 2001.
Ravi Gulati, president of network operations software at Lucent, said,
"The sale of LoopCare is aligned with our network management strategy. We've
worked with Tollgrade since 1998 to ensure interoperability of our LoopCare
product and Tollgrade's DigiTest product. The LoopCare business is in strong
hands. For our customers, the transition will be seamless. For our LoopCare
business employees, this is an exciting opportunity to expand the market for the
LoopCare and DigiTest products."
Noted Allison, "The LoopCare staff is critical to this effort. They're
talented folks with a scientific tradition. We want to show people just how
great they are through our direct and indirect sales and service channels while
taking advantage of the value-oriented franchise that Tollgrade has built among
our customers. The LoopCare team also has some great relationships that they've
developed outside of the RBOC world, which we're looking to foster and build."
Finally, Allison stated, "This is proving to be a solid third quarter
for Tollgrade for at least two reasons. First, in a tough environment, we expect
our revenue to approximate $16 million, and earnings will be approximately $.15,
both of which are within the range that we noted in our second quarter earnings
release. And, second, we're buying a product line that makes us a full consumer
testing provider when combined with our DigiTest products."
Parker/Hunter Incorporated acted as financial advisor to Tollgrade in
connection with this transaction.
CONFERENCE CALL
On Monday, October 1, 2001, at 4:00 p.m. (Eastern Time), Chris Allison,
Tollgrade's Chairman and Chief Executive Officer, will host a teleconference to
discuss the company's acquisition of LoopCare. The telephone number for U.S.
participants is 866-233-3843, and for international callers the number is
612-288-0329.
In addition, participants may listen to the conference call via a live
broadcast over the Internet. To participate in this webcast, simply log on to
http://videonewswire.com/event.asp?id=1117 or log onto www.tollgrade.com and
visit the Investor Events page. The conference call also will be available for
replay from 8:30 p.m. Monday, October 1, 2001 until 11:59 p.m. Monday, October
8, 2001. Please call 1-800-475-6701 (320-365-3844 for international callers) and
use Access Code 605859.
ABOUT TOLLGRADE
Tollgrade Communications, Inc. (NASDAQ: TLGD) designs, engineers,
markets and supports test system, test access and status monitoring products for
the telecommunications and cable television industries. Tollgrade, which is
headquartered in a suburb of Pittsburgh, Pa., recorded 2000 revenues of $114.4
million. The company maintains a presence in regions across the United States
and in the United Kingdom. Tollgrade's World Wide Web address is
www.tollgrade.com.
ABOUT LUCENT TECHNOLOGIES
Lucent Technologies, headquartered in Murray Hill, N.J., designs and
delivers networks for the world's largest communications service providers.
Backed by Bell Labs research and development, Lucent relies on its strengths in
mobility, optical, data and voice networking technologies as well as software
and services to develop next-generation networks.
The company's systems, services and software are designed to help
customers quickly deploy and better manage their networks and create new,
revenue-generating services that help
business and consumers. For more information on Lucent Technologies, visit its
Web site at http://www.lucent.com.
FORWARD-LOOKING STATEMENTS
Statements included here, which are not historical in nature, are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including without limitation,
statements as to management's beliefs, strategies, plans, expectations or
opinions in connection with company performance, which are based on a number of
assumptions concerning future conditions that may ultimately proved to be
inaccurate.
The forward-looking statements must be qualified by important factors
that could cause actual earnings and other results to differ materially from
those achieved in the past or those expected by the company. These include:
customers' ability to meet established purchase forecasts and their own growth
projections; the ability of certain customers to maintain financial strength and
access to capital; the ability for sales and marketing partners to meet their
own performance objectives and provide vendor financing to certain local
exchange carriers; customers' seasonal buying patterns and the risk of order
cancellations; risk of shortage of key components and possibilities of limited
source of supply; manufacturing delays and availability of manufacturial
capacity; intense competition in the market for the company's products; rapid
technological change along with the need to continually develop new products and
gain customer acceptance and approval; the company's dependence on a relatively
narrow range of products; competition; the company's dependence on key
employees; difficulties in managing the company's growth; the company's
dependence upon a small number of large customers and certain suppliers; the
company's dependence upon proprietary rights; risks of third party claims of
infringements; possibility of product defects; the potential of having excess
inventory and risk of parts' obsolescence should demand for the company's
products decrease substantially; and government regulation. Statements included
here speak as of the date of this release, and the company disclaims any duty to
update.
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(R) DigiTest is a registered trademark of Tollgrade Communications, Inc