DMC Stratex Networks Announces Preliminary Fourth Quarter Revenue And Earnings Expectations

Apr 04, 2001, 01:00 ET from DMC Stratex Networks, Inc.

    SAN JOSE, Calif., April 4 /PRNewswire/ --
 DMC Stratex Networks, Inc. (Nasdaq:   STXN), today announced that the Company
 expects revenues of between $104 million and $107 million for the
 fourth quarter of its Fiscal Year 2001, ended March 31, 2001, and earnings per
 share are estimated to be $0.09 to $0.11, before any one-time charges. This
 compares to revenue of $88.6 million and earnings per share of $0.10 in Q4 of
 Fiscal Year 2000.
     Revenues for the Fiscal Year 2001 are expected to be $411 million to
 $414 million and earnings per share are expected to be $0.50 to $0.52, before
 any one-time charges, compared to revenue of $300.5 million and earnings per
 share of $0.17 in Fiscal Year 2000. These expected results for the fourth
 quarter and total Fiscal Year 2001 are below prior Company expectations.
     A key factor in the lower revenue was a reduction in sales to
 North America wireless Competitive Local Exchange Carriers (CLECs), reflecting
 a weakening liquidity position in this market. CLECs represented a
 significantly lower proportion of the revenue for the quarter than was
 anticipated when the quarter began. Also, due to the CLEC liquidity situation,
 certain revenue transactions were not recorded as they did not meet the
 Company's criteria for revenue recognition. Shifts in customer schedules
 during the quarter, and in particular in the latter part of March, occurred
 too late to rearrange manufacturing schedules and shift production to meet
 other customer requirements.
     DMC Stratex Networks is reviewing the financial condition of certain of
 its customers, in particular the wireless CLECs, to determine what, if any,
 financial exposure exists on its balance sheet, primarily in accounts
 receivable and inventory. Based on this review, which will be completed prior
 to the Company's release of its Q4 and Fiscal Year 2001 financial results
 scheduled to be announced on April 24, 2001, additional reserves or
 adjustments may be recorded. A preliminary review indicates these one-time
 charges may be in the range of $20 million to 40 million. While the Company
 previously factored into its forecasts for Fiscal Year 2002, ending
 March 31, 2002, lower demand from CLECs, in light of recent developments the
 outlook for Fiscal Year 2002 is being re-reviewed for CLECs as well as other
 markets served by DMC Stratex Networks.
     "The availability of capital which our customers require to build out
 their networks is clearly tightening and this is having an impact on the
 outlook for our business," said Sam Smookler, DMC Stratex Networks' President
 and CEO. "While we continue to see demand in certain market sectors,
 particularly internationally, the market conditions in the CLEC market, as
 well as some delays in the 3G market in Europe, are causing us to examine our
 assumptions and the overall revenue and profit expectations for the next
 fiscal year. We will continue to operate conservatively and have begun to
 curtail spending overall while focusing on our major new product programs to
 meet our goal of continuing to be a market leader in the growing high capacity
 wireless market. To this end, we have recently shipped our first
 Altium 311 radio to a customer in Europe."
     The Company has scheduled a conference call for 5 p.m. EDT (2 p.m. PDT)
 today, hosted by Sam Smookler, president and CEO, and Carl Thomsen, senior
 vice president and CFO, to discuss these matters and answer questions.
      To access the call live via the Internet, investors should point their
 browser to http://www.dmcstratexnetworks.com/investor/ , click on the webcast
 link and follow the registration instructions. Listeners will need Windows
 Media Player to access the webcast. The link will continue to be available for
 two days following the conference call.
      Investors can also join the company's teleconference by calling
 719-457-2601, and referencing the confirmation number 724877. The call-in
 lines will be available to callers on a first-come, first-served basis. A
 telephone replay will also be available for two days after the teleconference
 by calling 719-457-0820 and using the access code 724877.
     With worldwide headquarters in San Jose, Calif., DMC Stratex Networks,
 Inc., is one of the world's foremost wireless solutions providers for cellular
 applications and broadband access -- enabling the development of complex
 communications networks worldwide. Since its founding in 1984, the Company has
 achieved international recognition for quality, innovation, and technical
 superiority in delivering data, voice, and video communication systems,
 including comprehensive service and support. DMC Stratex Networks, with its
 broad product offering and worldwide sales and support organization, is
 strategically positioned to serve its customers' needs in wireless
 high-capacity transmission technology. Additional information can be found at
 www.dmcstratexnetworks.com.
     The statements in this press release that relate to the Company's
 expectations, plans, intentions or strategies, including with respect to
 demand for the Company's broadband wireless products, its positioning for
 continued success, and continued market growth, are forward-looking. The
 events that they describe may not actually take place. These forward-looking
 statements are based on current expectations and the Company assumes no
 obligation to update this information. The Company's actual results could
 differ materially from those anticipated in these forward-looking statements
 as a result of certain factors, including the volume and timing of orders for
 the Company's products, the ability of customers to pay for equipment
 purchased, availability of financing for network expansions, the ability of
 the Company and its suppliers to respond to changes made by customers in their
 orders, the ability of the Company to bring its new products to market quickly
 at cost-effective prices and to add innovative features that differentiate its
 products from those of its competitors, and competition in the microwave and
 access business. For a further discussion of such factors, see the
 "Risk Factors" in the Company's Form 10-K filed with the SEC on June 29, 2000.
 
 

SOURCE DMC Stratex Networks, Inc.
    SAN JOSE, Calif., April 4 /PRNewswire/ --
 DMC Stratex Networks, Inc. (Nasdaq:   STXN), today announced that the Company
 expects revenues of between $104 million and $107 million for the
 fourth quarter of its Fiscal Year 2001, ended March 31, 2001, and earnings per
 share are estimated to be $0.09 to $0.11, before any one-time charges. This
 compares to revenue of $88.6 million and earnings per share of $0.10 in Q4 of
 Fiscal Year 2000.
     Revenues for the Fiscal Year 2001 are expected to be $411 million to
 $414 million and earnings per share are expected to be $0.50 to $0.52, before
 any one-time charges, compared to revenue of $300.5 million and earnings per
 share of $0.17 in Fiscal Year 2000. These expected results for the fourth
 quarter and total Fiscal Year 2001 are below prior Company expectations.
     A key factor in the lower revenue was a reduction in sales to
 North America wireless Competitive Local Exchange Carriers (CLECs), reflecting
 a weakening liquidity position in this market. CLECs represented a
 significantly lower proportion of the revenue for the quarter than was
 anticipated when the quarter began. Also, due to the CLEC liquidity situation,
 certain revenue transactions were not recorded as they did not meet the
 Company's criteria for revenue recognition. Shifts in customer schedules
 during the quarter, and in particular in the latter part of March, occurred
 too late to rearrange manufacturing schedules and shift production to meet
 other customer requirements.
     DMC Stratex Networks is reviewing the financial condition of certain of
 its customers, in particular the wireless CLECs, to determine what, if any,
 financial exposure exists on its balance sheet, primarily in accounts
 receivable and inventory. Based on this review, which will be completed prior
 to the Company's release of its Q4 and Fiscal Year 2001 financial results
 scheduled to be announced on April 24, 2001, additional reserves or
 adjustments may be recorded. A preliminary review indicates these one-time
 charges may be in the range of $20 million to 40 million. While the Company
 previously factored into its forecasts for Fiscal Year 2002, ending
 March 31, 2002, lower demand from CLECs, in light of recent developments the
 outlook for Fiscal Year 2002 is being re-reviewed for CLECs as well as other
 markets served by DMC Stratex Networks.
     "The availability of capital which our customers require to build out
 their networks is clearly tightening and this is having an impact on the
 outlook for our business," said Sam Smookler, DMC Stratex Networks' President
 and CEO. "While we continue to see demand in certain market sectors,
 particularly internationally, the market conditions in the CLEC market, as
 well as some delays in the 3G market in Europe, are causing us to examine our
 assumptions and the overall revenue and profit expectations for the next
 fiscal year. We will continue to operate conservatively and have begun to
 curtail spending overall while focusing on our major new product programs to
 meet our goal of continuing to be a market leader in the growing high capacity
 wireless market. To this end, we have recently shipped our first
 Altium 311 radio to a customer in Europe."
     The Company has scheduled a conference call for 5 p.m. EDT (2 p.m. PDT)
 today, hosted by Sam Smookler, president and CEO, and Carl Thomsen, senior
 vice president and CFO, to discuss these matters and answer questions.
      To access the call live via the Internet, investors should point their
 browser to http://www.dmcstratexnetworks.com/investor/ , click on the webcast
 link and follow the registration instructions. Listeners will need Windows
 Media Player to access the webcast. The link will continue to be available for
 two days following the conference call.
      Investors can also join the company's teleconference by calling
 719-457-2601, and referencing the confirmation number 724877. The call-in
 lines will be available to callers on a first-come, first-served basis. A
 telephone replay will also be available for two days after the teleconference
 by calling 719-457-0820 and using the access code 724877.
     With worldwide headquarters in San Jose, Calif., DMC Stratex Networks,
 Inc., is one of the world's foremost wireless solutions providers for cellular
 applications and broadband access -- enabling the development of complex
 communications networks worldwide. Since its founding in 1984, the Company has
 achieved international recognition for quality, innovation, and technical
 superiority in delivering data, voice, and video communication systems,
 including comprehensive service and support. DMC Stratex Networks, with its
 broad product offering and worldwide sales and support organization, is
 strategically positioned to serve its customers' needs in wireless
 high-capacity transmission technology. Additional information can be found at
 www.dmcstratexnetworks.com.
     The statements in this press release that relate to the Company's
 expectations, plans, intentions or strategies, including with respect to
 demand for the Company's broadband wireless products, its positioning for
 continued success, and continued market growth, are forward-looking. The
 events that they describe may not actually take place. These forward-looking
 statements are based on current expectations and the Company assumes no
 obligation to update this information. The Company's actual results could
 differ materially from those anticipated in these forward-looking statements
 as a result of certain factors, including the volume and timing of orders for
 the Company's products, the ability of customers to pay for equipment
 purchased, availability of financing for network expansions, the ability of
 the Company and its suppliers to respond to changes made by customers in their
 orders, the ability of the Company to bring its new products to market quickly
 at cost-effective prices and to add innovative features that differentiate its
 products from those of its competitors, and competition in the microwave and
 access business. For a further discussion of such factors, see the
 "Risk Factors" in the Company's Form 10-K filed with the SEC on June 29, 2000.
 
 SOURCE  DMC Stratex Networks, Inc.