DMC Stratex Networks Reports Fourth Quarter and Fiscal Year 2001 Results

Company Posts Quarterly Sales of $110.3 Million, Net Income of $6.4 Million

Before CLEC-Related Reserves



Apr 24, 2001, 01:00 ET from DMC Stratex Networks, Inc.

    SAN JOSE, Calif., April 24 /PRNewswire Interactive News Release/ --
 DMC Stratex Networks, Inc. (Nasdaq:   STXN), one of the world's foremost
 solutions providers for cellular applications and broadband wireless access,
 today reported results for the fourth quarter and fiscal year 2001, ended
 March 31, 2001.  Net sales for the fourth quarter totaled $110.3 million, a
 24 percent increase compared to sales of $88.6 million in the fourth quarter
 of fiscal 2000.
     Net income for the fiscal 2001 fourth quarter, excluding reserves
 resulting from the impact of the financially distressed Competitive Local
 Exchange Carrier (CLEC) market, was $6.4 million, or $0.09 per share, compared
 to the fiscal 2000 fourth quarter's net income of $7.3 million, or
 $0.10 per share.  Including these reserves, the net loss for the fiscal 2001
 fourth quarter was $39.2 million, or $0.53 per share.
     For the fiscal year 2001, DMC reported sales of $417.7 million, a
 39 percent increase compared to $300.5 million in fiscal year 2000.  Excluding
 the reserves mentioned above, net income for fiscal year 2001 was
 $38.6 million, or $0.51 per share, compared to a net income of $12.1 million,
 or $0.17 per share, for fiscal year 2000.  Including the CLEC-related
 reserves, the Company reported a net loss for the year of $7.0 million, or
 $.10 per share.
     During the fiscal 2001 fourth quarter, the company received $100.6 million
 in new orders, compared to $107.8 million in the fourth quarter of
 fiscal 2000.  New orders for the year were $492.8 million, an increase of
 40 percent compared to orders during fiscal year 2000 of $351.1 million.  The
 backlog as of March 31, 2001, was $160 million.  The reported backlog at the
 end of the fourth quarter reflects an adjustment of approximately $19 million
 resulting from the removal of certain orders received in the prior fiscal year
 no longer considered shippable within the next 12 months.
     "While indications continue that there is substantial wireless
 infrastructure demand worldwide, actual order input recently began to slow
 after increasing significantly over the first three quarters of fiscal year
 2001," said Sam Smookler, DMC Stratex Networks' president and CEO.  "A rapid
 change in demand in the U.S. CLEC market significantly impacted our
 fourth quarter results and our outlook for fiscal year 2002.  Visibility into
 this market segment has rapidly deteriorated, requiring us to provide reserves
 for receivables, inventories and related investments.
     "While our order input remained reasonably strong through the quarter in
 the other market segments that represented the majority of our business last
 year, we nevertheless are maintaining a cautious outlook on business in the
 near term," Smookler continued.  "We are especially emphasizing our business
 focus in the historically strong international mobile cellular infrastructure
 markets in Europe, Asia, South America and Africa, and will adjust our
 business structure in light of these changes."
     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 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.
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
 
                              Three Months Ended        Twelve Months Ended
                                   March 31,                  March 31,
                              2001          2000         2001         2000
                                (unaudited)
 
     Net Sales             $110,300       $88,588     $417,661      $300,503
      Cost of sales          81,084        59,893      288,865       209,653
      Inventory valuation
       charges               15,368             0       15,368             0
     Gross profit            13,848        28,695      113,428        90,850
     Operating Expenses
      Research and
       development            6,329         6,119       24,006        24,372
      Selling, general and
       administrative        15,428        14,825       62,715        51,953
      Receivable valuation
       charges               22,000             0       22,000             0
     Total operating
      expenses               43,757        20,944      108,721        76,325
     Operating income
      (loss)               (29,909)         7,751        4,707        14,525
      Other income               90         1,394        3,344           645
      Write down of
       investments,
       other assets        (14,003)             0     (14,003)             0
     Income (loss) before
      income taxes         (43,822)         9,145      (5,952)        15,170
      Provision (benefit)
       for income taxes     (4,637)         1,829        1,043         3,034
     Net Income (Loss)    ($39,185)        $7,316     ($6,995)       $12,136
 
     Basic earnings (loss)
      per share             ($0.53)         $0.10      ($0.10)         $0.18
     Diluted earnings
      (loss) per share      ($0.53)         $0.10      ($0.10)         $0.17
     Basic weighted
      average shares
      outstanding            73,719        70,548       73,391        65,922
     Diluted weighted
      average shares
      outstanding            73,719        76,010       73,391        71,642
 
     Pro-forma (unaudited)
     Net Income before
      special charges        $6,416        $7,316      $38,606       $12,136
     Diluted earnings
      per share before
      charges                 $0.09         $0.10        $0.51         $0.17
     Diluted weighted
      average shares
      before reserves        74,876        76,010       76,342        71,642
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,      March 31,
                                                       2001           2000
 
     Assets
 
     Cash and short-terms investments                 $37,858       $123,942
     Accounts receivable, net                         116,427         98,520
     Inventories                                       92,863         48,547
     Other current assets                              17,302         11,201
       Total current assets                           264,450        282,210
     Property & equipment, net                         54,777         43,801
     Other assets                                       7,553         11,430
       Total assets                                  $326,780       $337,441
 
     Liabilities and Stockholders' Equity
 
     Current maturities of capital lease
      obligations and notes payable                        $0           $167
     Accounts payable                                  50,653         39,582
     Other current liabilities                         16,264         33,300
       Total current liabilities                       66,917         73,049
     Stockholders' equity                             259,863        264,392
       Total liabilities and stockholders' equity    $326,780       $337,441
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X88651531
 
 

SOURCE DMC Stratex Networks, Inc.
    SAN JOSE, Calif., April 24 /PRNewswire Interactive News Release/ --
 DMC Stratex Networks, Inc. (Nasdaq:   STXN), one of the world's foremost
 solutions providers for cellular applications and broadband wireless access,
 today reported results for the fourth quarter and fiscal year 2001, ended
 March 31, 2001.  Net sales for the fourth quarter totaled $110.3 million, a
 24 percent increase compared to sales of $88.6 million in the fourth quarter
 of fiscal 2000.
     Net income for the fiscal 2001 fourth quarter, excluding reserves
 resulting from the impact of the financially distressed Competitive Local
 Exchange Carrier (CLEC) market, was $6.4 million, or $0.09 per share, compared
 to the fiscal 2000 fourth quarter's net income of $7.3 million, or
 $0.10 per share.  Including these reserves, the net loss for the fiscal 2001
 fourth quarter was $39.2 million, or $0.53 per share.
     For the fiscal year 2001, DMC reported sales of $417.7 million, a
 39 percent increase compared to $300.5 million in fiscal year 2000.  Excluding
 the reserves mentioned above, net income for fiscal year 2001 was
 $38.6 million, or $0.51 per share, compared to a net income of $12.1 million,
 or $0.17 per share, for fiscal year 2000.  Including the CLEC-related
 reserves, the Company reported a net loss for the year of $7.0 million, or
 $.10 per share.
     During the fiscal 2001 fourth quarter, the company received $100.6 million
 in new orders, compared to $107.8 million in the fourth quarter of
 fiscal 2000.  New orders for the year were $492.8 million, an increase of
 40 percent compared to orders during fiscal year 2000 of $351.1 million.  The
 backlog as of March 31, 2001, was $160 million.  The reported backlog at the
 end of the fourth quarter reflects an adjustment of approximately $19 million
 resulting from the removal of certain orders received in the prior fiscal year
 no longer considered shippable within the next 12 months.
     "While indications continue that there is substantial wireless
 infrastructure demand worldwide, actual order input recently began to slow
 after increasing significantly over the first three quarters of fiscal year
 2001," said Sam Smookler, DMC Stratex Networks' president and CEO.  "A rapid
 change in demand in the U.S. CLEC market significantly impacted our
 fourth quarter results and our outlook for fiscal year 2002.  Visibility into
 this market segment has rapidly deteriorated, requiring us to provide reserves
 for receivables, inventories and related investments.
     "While our order input remained reasonably strong through the quarter in
 the other market segments that represented the majority of our business last
 year, we nevertheless are maintaining a cautious outlook on business in the
 near term," Smookler continued.  "We are especially emphasizing our business
 focus in the historically strong international mobile cellular infrastructure
 markets in Europe, Asia, South America and Africa, and will adjust our
 business structure in light of these changes."
     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 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.
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
 
                              Three Months Ended        Twelve Months Ended
                                   March 31,                  March 31,
                              2001          2000         2001         2000
                                (unaudited)
 
     Net Sales             $110,300       $88,588     $417,661      $300,503
      Cost of sales          81,084        59,893      288,865       209,653
      Inventory valuation
       charges               15,368             0       15,368             0
     Gross profit            13,848        28,695      113,428        90,850
     Operating Expenses
      Research and
       development            6,329         6,119       24,006        24,372
      Selling, general and
       administrative        15,428        14,825       62,715        51,953
      Receivable valuation
       charges               22,000             0       22,000             0
     Total operating
      expenses               43,757        20,944      108,721        76,325
     Operating income
      (loss)               (29,909)         7,751        4,707        14,525
      Other income               90         1,394        3,344           645
      Write down of
       investments,
       other assets        (14,003)             0     (14,003)             0
     Income (loss) before
      income taxes         (43,822)         9,145      (5,952)        15,170
      Provision (benefit)
       for income taxes     (4,637)         1,829        1,043         3,034
     Net Income (Loss)    ($39,185)        $7,316     ($6,995)       $12,136
 
     Basic earnings (loss)
      per share             ($0.53)         $0.10      ($0.10)         $0.18
     Diluted earnings
      (loss) per share      ($0.53)         $0.10      ($0.10)         $0.17
     Basic weighted
      average shares
      outstanding            73,719        70,548       73,391        65,922
     Diluted weighted
      average shares
      outstanding            73,719        76,010       73,391        71,642
 
     Pro-forma (unaudited)
     Net Income before
      special charges        $6,416        $7,316      $38,606       $12,136
     Diluted earnings
      per share before
      charges                 $0.09         $0.10        $0.51         $0.17
     Diluted weighted
      average shares
      before reserves        74,876        76,010       76,342        71,642
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,      March 31,
                                                       2001           2000
 
     Assets
 
     Cash and short-terms investments                 $37,858       $123,942
     Accounts receivable, net                         116,427         98,520
     Inventories                                       92,863         48,547
     Other current assets                              17,302         11,201
       Total current assets                           264,450        282,210
     Property & equipment, net                         54,777         43,801
     Other assets                                       7,553         11,430
       Total assets                                  $326,780       $337,441
 
     Liabilities and Stockholders' Equity
 
     Current maturities of capital lease
      obligations and notes payable                        $0           $167
     Accounts payable                                  50,653         39,582
     Other current liabilities                         16,264         33,300
       Total current liabilities                       66,917         73,049
     Stockholders' equity                             259,863        264,392
       Total liabilities and stockholders' equity    $326,780       $337,441
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X88651531
 
 SOURCE  DMC Stratex Networks, Inc.