ASC Reports First Quarter Revenue of $13.5M, Up 170 Percent From Q1 2000

Apr 19, 2001, 01:00 ET from Advanced Switching Communications

    VIENNA, Va., April 19 /PRNewswire/ -- Advanced Switching Communications, a
 leading provider of evolutionary network access solutions, today reported
 revenue of $13.5 million for the first quarter of 2001, up more than 170
 percent from the $5.0 million reported in the first quarter of 2000.
     ASC reported a pro forma net loss per share of $0.03 for the first quarter
 of 2001, a 62 percent improvement from the $0.08 pro forma per-share loss
 reported for the first quarter of 2000. The company reported a pro forma net
 loss of $1.3 million for the first quarter of 2001, down 53 percent from the
 $2.8 million pro forma net loss reported for the first quarter of 2000. The
 pro forma net loss and per-share loss figures do not include the amortization
 of stock-based compensation.
     Gross margin for the quarter was 47.5 percent, up from 40.0 percent for
 the fourth quarter of 2000 and 24.4 percent for the first quarter of 2000. It
 was the fourth successive quarter in which the company reported significant
 gross margin improvement.
     As of March 31, the company reported assets totaling $138 million --
 including $101.8 million in cash and marketable securities. At the end of
 March 2000, the company reported assets of $40.9 million, including $30.6
 million in cash and securities.
     "Despite the significant challenges our industry has faced in recent
 months and especially in the first quarter, ASC turned in a remarkably strong
 performance," said President and Chief Executive Officer Asghar D. Mostafa.
     "We continue to execute on our business plan and have made significant
 progress across several fronts. We generated more sales from established
 communications companies, we expanded our relationship with our channel
 partners and we delivered new product features and capabilities," Mostafa
 said.
     In the quarter, the company launched ASCmanager(TM), a network element
 management system that provides complete, end-to-end control of ASC network
 switches and multiplexers, "point and click" provisioning and an open platform
 for integration with existing and next-generation operational support systems.
     In addition, the company introduced new features to its stackable product
 line and the A-4000, a category breaking broadband product that intelligently
 aggregates TDM, ATM, Frame Relay, IP over ATM and IP over Frame Relay onto a
 single ATM or ATM optical platform. The new feature set increases the A-4000's
 density and high-speed optical interfaces, offering communications companies
 greater efficiency and flexibility in their network deployment.
     Increased sales of the A-4000 in the first quarter helped drive the
 continuing migration of the ASC customer base toward more established
 communications companies. In the first quarter, nearly three-quarters of the
 company's sales were to established carriers, up from about half in the fourth
 quarter of 2001.
     "Greater sales of the A-4000 to a customer base increasingly composed of
 more established carriers was an important factor in our strong gross margin
 performance," said Chief Financial Officer Harry D'Andrea. "Our more
 established customers are in an excellent position to realize the full value
 of all of the features and functions that we build into this advanced
 product."
     D'Andrea also noted that ASC ended the first quarter with virtually no
 debt and cash and marketable securities of more than $100 million. "The
 company has a strong financial foundation and is well positioned to meet the
 challenges created by the uncertain environment in the communications industry
 today," D'Andrea said.
 
     About ASC
     Headquartered in Vienna, Virginia, Advanced Switching Communications, Inc.
 (Nasdaq:   ASCX) is a leading provider of evolutionary network access solutions
 for communications companies around the world.  ASC's unique MultiStream(TM)
 technology and integrated family of access switches and multiplexers give
 communications companies the value and flexibility they need to aggressively
 deploy broadband services in markets of all sizes. By focusing on the access
 portion of the global communications network and intelligently aggregating
 diverse network protocols onto a single, unified backbone, ASC enables
 carriers to cost-effectively offer their customers the latest in packet-based
 applications. ASC products meet rigorous Level 3 Network Equipment Building
 Standards (NEBS) and are interoperable with the industry's leading
 telecommunications equipment providers.  More information about ASC is
 available online at http://www.asc.com .
 
     MultiStream is a trademark of Advanced Switching Communications, Inc.
 
     Except for any historical information, the matters discussed in this press
 release contain forward-looking statements that reflect the company's current
 views regarding future events. These forward-looking statements are subject to
 risks and uncertainties that could cause actual results to differ, possibly
 materially, from those projected in the forward-looking statements. Those
 risks and uncertainties include, but are not limited to economic, key
 employee, vendor, competitive and technological factors affecting the
 company's growth, operations, markets, products, services and other factors.
 Some, but not all, of these risks and uncertainties are discussed in detail in
 the company's filings with the Securities and Exchange Commission,
 particularly the "Risk Factors" section of our 10-K filed on March 30,2001 and
 the final prospectus filed on October 4, 2000 in connection with our initial
 public offering.
 
                            Financial tables follow
 
 
     Advanced Switching Communications, Inc.
     Consolidated Statements of Operations
      (in thousands, except per share amounts)
                                                      Quarter Ended March 31,
                                                       2001            2000
     Net Revenue                                      $13,508         $4,994
     Cost of Goods Sold                                 7,089          3,777
     Gross Margin                                       6,419          1,217
 
     Research & Development                             4,295          2,651
     Sales & Marketing                                  3,944          1,453
     General & Administrative                             992            476
     Amortization of stock Compensation                   570            129
     Operating Expenses                                 9,801          4,709
     Operating Loss                                    (3,382)        (3,492)
 
     Interest Income                                    1,526            604
     Earnings Before Taxes                             (1,856)        (2,888)
     Taxes                                                  0              0
     Net Loss                                         $(1,856)       $(2,888)
 
     Pro Forma Net Loss (1)                           $(1,286)       $(2,759)
 
     Net Loss Per Share:
     Basic and Diluted Net Loss Per Share              $(0.04)        $(0.25)
     Weighted Average Shares                           42,268         11,560
 
     Pro Forma Net Loss Per Share:(2)
     Basic and Diluted Net Income (Loss) Per Share     $(0.03)        $(0.09)
     Basic and Diluted Pro Forma Net Loss Per Share    $(0.03)        $(0.08)
 
     Pro Forma Weighted Average Shares                 42,268         33,346
 
     (1) Excludes the amortization of stock compensation.
     (2) For the quarter ended March 31, 2000, pro forma basic and diluted net
         loss per share have been calculated assuming the conversion of all
         preferred shares into common shares, as if the conversion had occurred
         at the beginning of the quarter.
 
 
     Advanced Switching Communications, Inc.
     Condensed Consolidated Balance Sheets
 
      (in thousands)
                                                     March 31,    December 31,
                                                       2001           2000
     Current Assets:
       Cash and Cash Equivalents                      $71,477       $100,609
       Marketable Securities                           21,359         11,916
       Accounts Receivable                             15,299          8,225
       Inventory                                        9,826          6,937
       Other Current Assets                             3,783          2,276
         Total Current Assets                         121,744        129,963
 
     Property, Plant & Equipment                        6,321          5,305
     Marketable Securities                              8,977              -
     Other Assets                                         937          2,080
     Total Assets                                    $137,979       $137,348
 
     Current Liabilities:
       Accounts Payable                                $6,750         $5,383
       Accrued Liabilities                              3,797          3,181
       Current Portion of Debt                             62             96
         Total Current Liabilities                     10,609          8,660
 
     Deferred Rent                                         89             85
     Long-term Debt                                         5              5
 
     Stockholders' Equity (Deficit):
       Common Stock                                       107            107
       Treasury Stock                                    (200)          (200)
       Additional Paid-In Capital                     167,518        168,121
       Retained Earnings (Deficit)                    (32,832)       (30,977)
       Unrealized gains (losses)                           44              8
       Deferred Compensation                           (7,361)        (8,461)
         Total Stockholders' Equity (Deficit)         127,276        128,598
     Total Liabilities & Stockholders'
      Equity (Deficit)                               $137,979       $137,348
 
 

SOURCE Advanced Switching Communications
    VIENNA, Va., April 19 /PRNewswire/ -- Advanced Switching Communications, a
 leading provider of evolutionary network access solutions, today reported
 revenue of $13.5 million for the first quarter of 2001, up more than 170
 percent from the $5.0 million reported in the first quarter of 2000.
     ASC reported a pro forma net loss per share of $0.03 for the first quarter
 of 2001, a 62 percent improvement from the $0.08 pro forma per-share loss
 reported for the first quarter of 2000. The company reported a pro forma net
 loss of $1.3 million for the first quarter of 2001, down 53 percent from the
 $2.8 million pro forma net loss reported for the first quarter of 2000. The
 pro forma net loss and per-share loss figures do not include the amortization
 of stock-based compensation.
     Gross margin for the quarter was 47.5 percent, up from 40.0 percent for
 the fourth quarter of 2000 and 24.4 percent for the first quarter of 2000. It
 was the fourth successive quarter in which the company reported significant
 gross margin improvement.
     As of March 31, the company reported assets totaling $138 million --
 including $101.8 million in cash and marketable securities. At the end of
 March 2000, the company reported assets of $40.9 million, including $30.6
 million in cash and securities.
     "Despite the significant challenges our industry has faced in recent
 months and especially in the first quarter, ASC turned in a remarkably strong
 performance," said President and Chief Executive Officer Asghar D. Mostafa.
     "We continue to execute on our business plan and have made significant
 progress across several fronts. We generated more sales from established
 communications companies, we expanded our relationship with our channel
 partners and we delivered new product features and capabilities," Mostafa
 said.
     In the quarter, the company launched ASCmanager(TM), a network element
 management system that provides complete, end-to-end control of ASC network
 switches and multiplexers, "point and click" provisioning and an open platform
 for integration with existing and next-generation operational support systems.
     In addition, the company introduced new features to its stackable product
 line and the A-4000, a category breaking broadband product that intelligently
 aggregates TDM, ATM, Frame Relay, IP over ATM and IP over Frame Relay onto a
 single ATM or ATM optical platform. The new feature set increases the A-4000's
 density and high-speed optical interfaces, offering communications companies
 greater efficiency and flexibility in their network deployment.
     Increased sales of the A-4000 in the first quarter helped drive the
 continuing migration of the ASC customer base toward more established
 communications companies. In the first quarter, nearly three-quarters of the
 company's sales were to established carriers, up from about half in the fourth
 quarter of 2001.
     "Greater sales of the A-4000 to a customer base increasingly composed of
 more established carriers was an important factor in our strong gross margin
 performance," said Chief Financial Officer Harry D'Andrea. "Our more
 established customers are in an excellent position to realize the full value
 of all of the features and functions that we build into this advanced
 product."
     D'Andrea also noted that ASC ended the first quarter with virtually no
 debt and cash and marketable securities of more than $100 million. "The
 company has a strong financial foundation and is well positioned to meet the
 challenges created by the uncertain environment in the communications industry
 today," D'Andrea said.
 
     About ASC
     Headquartered in Vienna, Virginia, Advanced Switching Communications, Inc.
 (Nasdaq:   ASCX) is a leading provider of evolutionary network access solutions
 for communications companies around the world.  ASC's unique MultiStream(TM)
 technology and integrated family of access switches and multiplexers give
 communications companies the value and flexibility they need to aggressively
 deploy broadband services in markets of all sizes. By focusing on the access
 portion of the global communications network and intelligently aggregating
 diverse network protocols onto a single, unified backbone, ASC enables
 carriers to cost-effectively offer their customers the latest in packet-based
 applications. ASC products meet rigorous Level 3 Network Equipment Building
 Standards (NEBS) and are interoperable with the industry's leading
 telecommunications equipment providers.  More information about ASC is
 available online at http://www.asc.com .
 
     MultiStream is a trademark of Advanced Switching Communications, Inc.
 
     Except for any historical information, the matters discussed in this press
 release contain forward-looking statements that reflect the company's current
 views regarding future events. These forward-looking statements are subject to
 risks and uncertainties that could cause actual results to differ, possibly
 materially, from those projected in the forward-looking statements. Those
 risks and uncertainties include, but are not limited to economic, key
 employee, vendor, competitive and technological factors affecting the
 company's growth, operations, markets, products, services and other factors.
 Some, but not all, of these risks and uncertainties are discussed in detail in
 the company's filings with the Securities and Exchange Commission,
 particularly the "Risk Factors" section of our 10-K filed on March 30,2001 and
 the final prospectus filed on October 4, 2000 in connection with our initial
 public offering.
 
                            Financial tables follow
 
 
     Advanced Switching Communications, Inc.
     Consolidated Statements of Operations
      (in thousands, except per share amounts)
                                                      Quarter Ended March 31,
                                                       2001            2000
     Net Revenue                                      $13,508         $4,994
     Cost of Goods Sold                                 7,089          3,777
     Gross Margin                                       6,419          1,217
 
     Research & Development                             4,295          2,651
     Sales & Marketing                                  3,944          1,453
     General & Administrative                             992            476
     Amortization of stock Compensation                   570            129
     Operating Expenses                                 9,801          4,709
     Operating Loss                                    (3,382)        (3,492)
 
     Interest Income                                    1,526            604
     Earnings Before Taxes                             (1,856)        (2,888)
     Taxes                                                  0              0
     Net Loss                                         $(1,856)       $(2,888)
 
     Pro Forma Net Loss (1)                           $(1,286)       $(2,759)
 
     Net Loss Per Share:
     Basic and Diluted Net Loss Per Share              $(0.04)        $(0.25)
     Weighted Average Shares                           42,268         11,560
 
     Pro Forma Net Loss Per Share:(2)
     Basic and Diluted Net Income (Loss) Per Share     $(0.03)        $(0.09)
     Basic and Diluted Pro Forma Net Loss Per Share    $(0.03)        $(0.08)
 
     Pro Forma Weighted Average Shares                 42,268         33,346
 
     (1) Excludes the amortization of stock compensation.
     (2) For the quarter ended March 31, 2000, pro forma basic and diluted net
         loss per share have been calculated assuming the conversion of all
         preferred shares into common shares, as if the conversion had occurred
         at the beginning of the quarter.
 
 
     Advanced Switching Communications, Inc.
     Condensed Consolidated Balance Sheets
 
      (in thousands)
                                                     March 31,    December 31,
                                                       2001           2000
     Current Assets:
       Cash and Cash Equivalents                      $71,477       $100,609
       Marketable Securities                           21,359         11,916
       Accounts Receivable                             15,299          8,225
       Inventory                                        9,826          6,937
       Other Current Assets                             3,783          2,276
         Total Current Assets                         121,744        129,963
 
     Property, Plant & Equipment                        6,321          5,305
     Marketable Securities                              8,977              -
     Other Assets                                         937          2,080
     Total Assets                                    $137,979       $137,348
 
     Current Liabilities:
       Accounts Payable                                $6,750         $5,383
       Accrued Liabilities                              3,797          3,181
       Current Portion of Debt                             62             96
         Total Current Liabilities                     10,609          8,660
 
     Deferred Rent                                         89             85
     Long-term Debt                                         5              5
 
     Stockholders' Equity (Deficit):
       Common Stock                                       107            107
       Treasury Stock                                    (200)          (200)
       Additional Paid-In Capital                     167,518        168,121
       Retained Earnings (Deficit)                    (32,832)       (30,977)
       Unrealized gains (losses)                           44              8
       Deferred Compensation                           (7,361)        (8,461)
         Total Stockholders' Equity (Deficit)         127,276        128,598
     Total Liabilities & Stockholders'
      Equity (Deficit)                               $137,979       $137,348
 
 SOURCE  Advanced Switching Communications