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CONTACT:
Martine Nadeau
Netergy Networks, Inc.
(514) 282-8484 x259
martine.nadeau@netergynet.com
NETERGY NETWORKS ANNOUNCES THIRD QUARTER FISCAL 2001 RESULTS
FOR IMMEDIATE RELEASE
SANTA CLARA, Calif., January 31, 2001 -- Netergy Networks, Inc. (Nasdaq: NTRG)
today announced financial results for its third quarter of fiscal 2001, which
ended December 31, 2000.
Total revenues for the third quarter of fiscal 2001 were $4.1 million, compared
with $6.2 million for the same period in the prior year and $3.9 million in the
prior fiscal quarter. The net loss for the quarter, including the cumulative
effect of a change in accounting principle and other non-cash items, was $11.8
million, or $0.47 per share, compared with a net loss of $2.2 million, or $0.12
per share for the same period last year, and a net loss of $15.0 million, or
$0.60 per share for the prior fiscal quarter.
The company recorded a $1.1 million non-cash expense during the third quarter of
fiscal 2001 to account for a beneficial conversion feature associated with the
convertible subordinated debentures and related warrants issued in December
1999. The expense, which was presented as a cumulative effect of a change in
accounting principle, increased the net loss per basic and diluted share for the
quarter by $0.05 per share.
ABOUT NETERGY NETWORKS
Netergy Networks is a provider of Internet Protocol (IP) network services
solutions and embedded network appliance technology for converged voice and data
networks. The company is based in Santa Clara, California, and has offices in
Canada, France and the United Kingdom. For more information, visit Netergy
Networks' web site at http://www.netergynet.com/
FINANCIAL TABLES TO FOLLOW
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NETERGY NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Nine Months Ended
DECEMBER 31, December 31, DECEMBER 31, December 31,
2000 1999 2000 1999
------------- ------------- ------------- -------------
Product revenues $ 2,388 $ 4,941 $ 9,962 $ 15,715
License and other revenues 1,063 1,297 2,758 3,127
Service revenues 653 -- 1,099 --
------------- ------------- ------------- -------------
Total revenues 4,104 6,238 13,819 18,842
Cost of revenues 1,948 1,993 5,291 6,792
------------- ------------- ------------- -------------
Gross profit 2,156 4,245 8,528 12,050
------------- ------------- ------------- -------------
Operating expenses:
Research and development 4,868 2,854 13,870 8,137
Sales, general and administrative 4,497 3,545 12,924 10,918
In-process research and development -- -- 4,563 10,100
Amortization of intangibles 3,612 189 7,375 424
------------ ------------ ------------ -------------
Total operating expenses 12,977 6,588 38,732 29,579
------------ ------------ ------------ -------------
Loss from operations (10,821) (2,343) (30,204) (17,529)
Other income, net 67 109 1,266 2,185
------------ ------------ ------------ -------------
Loss before provision for income taxes (10,754) (2,234) (28,938) (15,344)
Provision for income taxes -- -- 12 66
------------ ------------ ------------ -------------
Net loss before cumulative effect of
change in accounting principle (10,754) (2,234) (28,950) (15,410)
Cumulative effect of change in accounting
principle (1) (1,081) -- (1,081) --
------------ ------------ ------------ -------------
Net loss $ (11,835) $ (2,234) $ (30,031) $ (15,410)
============ ============ ============ =============
Net loss before cumulative effect of
change in accounting principle per basic
and diluted share $ (0.42) $ (0.12) $ (1.19) $ (0.88)
Cumulative effect of change in accounting
principle (1) (0.05) -- (0.05) --
------------ ------------ ------------ -------------
Net loss per basic and diluted share $ (0.47) $ (0.12) $ (1.24) $ (0.88)
============ ============ ============ =============
Basic and diluted shares outstanding 25,337 18,035 24,281 17,421
(1) The company recorded a $1.1 million expense during the third quarter of
fiscal 2001 to account for a beneficial conversion feature associated with the
convertible subordinated debentures and related warrants issued in December 1999
due to a change in accounting principle.
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NETERGY NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, UNAUDITED)
DECEMBER 31, March 31,
2000 2000
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ASSETS
Current assets:
Cash and cash equivalents $34,443 $48,576
Accounts receivable, net 2,174 2,394
Inventory 1,481 1,367
Prepaid expenses and other assets 3,174 1,043
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Total current assets 41,272 53,380
Property and equipment, net 7,645 2,687
Intangibles and other assets 37,438 3,916
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Total assets $86,355 $59,983
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,500 $ 1,887
Accrued compensation 2,599 2,154
Accrued warranty 559 694
Deferred revenue 5,823 731
Other accrued liabilities 1,875 1,629
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Total current liabilities 13,356 7,095
Long-term debt 717 --
Convertible subordinated debentures 6,053 5,498
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Total liabilities 20,126 12,593
Stockholders' equity 66,229 47,390
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Total liabilities and stockholders' equity $86,355 $59,983
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Editors: Netergy is a trademark of Netergy Networks, Inc.