Integrated Telecom Express Records Purchase Commitment Reserve

Company Reaffirms First Quarter Revenue Outlook of Over $6 Million



Apr 02, 2001, 01:00 ET from Integrated Telecom Express, Inc.

    SAN JOSE, Calif., April 2 /PRNewswire/ --
 Integrated Telecom Express, Inc. (Nasdaq:   ITXI) ("ITeX"), a leading designer
 and marketer of ADSL modem chipsets and software, today announced that it has
 recorded a reserve related to its valuation of commitments to purchase
 components for its Apollo 2 chipset. The adjustment resulted in reduced
 fourth quarter and full year 2000 pro forma net income and will increase the
 previously projected first quarter 2001 loss. In addition, the Company
 reaffirmed that its revenues for the first quarter ended March 31, 2001 are
 expected to be in excess of $6 million.
     In late 2000, based on purchase orders and anticipated future demand for
 its products, ITeX placed non-cancelable orders for Apollo 2 component
 inventory. Subsequent to the Company's release of unaudited fourth quarter
 results on January 24, the projected future demand for Apollo 2 chipsets
 declined as a result of increased price competition as well as customer
 transition to ITeX's new Apollo 3 chipset.
     In completing the Company's audited financial statements for the year
 ended December 31, 2000 for inclusion in its form 10-K, the Company reassessed
 the sales outlook for its Apollo 2 products. Based on current market
 conditions, it was determined that the projected future demand for Apollo 2
 products was less than estimated when the Company released its unaudited
 results on January 24, 2001. Accordingly, the Company has recorded a
 $3.3 million reserve for unfavorable purchase commitments as of
 December 31, 2000 in accordance with generally accepted accounting principles,
 including principles relating to accounting for subsequent events. The balance
 of the required reserve in the amount of approximately $850,000 will be
 recorded in the first quarter of 2001. As a result, fourth quarter and full
 year 2000 pro forma net income has been reduced to $1.95 million, or $0.04 per
 diluted share and $1.07 million, or $0.02 per diluted share, respectively.
 Reported net loss for fourth quarter and full year 2000 has been increased to
 $3.48 million, or ($0.08) per share, and $20.14 million, or ($0.66) per share,
 respectively.
     "The reserves that we have announced today regarding the Apollo 2 product
 line will impact our financial results in the fourth quarter of 2000 and the
 first quarter of 2001, and we do not currently expect additional charges
 regarding the Apollo 2 product in future quarters," stated Daniel Chen,
 chairman and interim CEO of Integrated Telecom Express. "Market adoption of
 our next-generation Apollo 3 is proceeding as are our new product development
 and introduction activities."
     Integrated Telecom Express is scheduled to release full unaudited
 first quarter financial results in late April or early May, and expects to
 provide further guidance on the current fiscal year's outlook at that time.
 
     About ITeX
     Integrated Telecom Express, Inc., headquartered in San Jose, California,
 designs, manufactures and markets ADSL Customer Premises Equipment (CPE) and
 Central Office (CO) integrated circuits and software solutions. ITeX products
 include analog and digital semiconductor devices with operating system drivers
 and network protocol software. ITeX is a contributing member of the standards
 bodies including DSL Forum, OpenDSL, ITU and T1E1. ITeX is also a member of
 the University of New Hampshire InterOperability Laboratory (UNH-IOL), where
 it has demonstrated interoperability with equipment from all major Digital
 Subscriber Line Access Multiplexer (DSLAM) vendors. Further information about
 ITeX is available on the Internet at http://www.itexinc.com .
 
     Forward-Looking Statements
     The foregoing statements regarding the Company's anticipated financial
 results for the first quarter of 2001, the anticipated amount of the reserve
 taken in the first quarter for Apollo 2 purchase commitments, the Company's
 expectation that Apollo 2 component inventory charges will not impact future
 quarters, adoption of the Apollo 3, future product development and
 introduction activities, and the release of the Company's full unaudited first
 quarter financial results and guidance on the current fiscal year's outlook
 are forward-looking in nature and subject to risks and uncertainties that may
 cause actual results to differ materially. Potential risks and uncertainties
 include the impact of closing entries and other accounting adjustments to
 first quarter 2001 results, the Company's ability to successfully transition
 customers from the Apollo 2 to the Apollo 3 chipset, changes in demand for the
 Apollo 2 and Apollo 3 chipsets, the direction and success of research and
 development efforts, changes in technology and the telecommunications market,
 competition, and changes in demand for the Company's products. The Company
 also refers readers to the risk factors identified in its Annual Report on
 Form 10-K for the year ended December 31, 2000 filed with the Securities and
 Exchange Commission.
 
 

SOURCE Integrated Telecom Express, Inc.
    SAN JOSE, Calif., April 2 /PRNewswire/ --
 Integrated Telecom Express, Inc. (Nasdaq:   ITXI) ("ITeX"), a leading designer
 and marketer of ADSL modem chipsets and software, today announced that it has
 recorded a reserve related to its valuation of commitments to purchase
 components for its Apollo 2 chipset. The adjustment resulted in reduced
 fourth quarter and full year 2000 pro forma net income and will increase the
 previously projected first quarter 2001 loss. In addition, the Company
 reaffirmed that its revenues for the first quarter ended March 31, 2001 are
 expected to be in excess of $6 million.
     In late 2000, based on purchase orders and anticipated future demand for
 its products, ITeX placed non-cancelable orders for Apollo 2 component
 inventory. Subsequent to the Company's release of unaudited fourth quarter
 results on January 24, the projected future demand for Apollo 2 chipsets
 declined as a result of increased price competition as well as customer
 transition to ITeX's new Apollo 3 chipset.
     In completing the Company's audited financial statements for the year
 ended December 31, 2000 for inclusion in its form 10-K, the Company reassessed
 the sales outlook for its Apollo 2 products. Based on current market
 conditions, it was determined that the projected future demand for Apollo 2
 products was less than estimated when the Company released its unaudited
 results on January 24, 2001. Accordingly, the Company has recorded a
 $3.3 million reserve for unfavorable purchase commitments as of
 December 31, 2000 in accordance with generally accepted accounting principles,
 including principles relating to accounting for subsequent events. The balance
 of the required reserve in the amount of approximately $850,000 will be
 recorded in the first quarter of 2001. As a result, fourth quarter and full
 year 2000 pro forma net income has been reduced to $1.95 million, or $0.04 per
 diluted share and $1.07 million, or $0.02 per diluted share, respectively.
 Reported net loss for fourth quarter and full year 2000 has been increased to
 $3.48 million, or ($0.08) per share, and $20.14 million, or ($0.66) per share,
 respectively.
     "The reserves that we have announced today regarding the Apollo 2 product
 line will impact our financial results in the fourth quarter of 2000 and the
 first quarter of 2001, and we do not currently expect additional charges
 regarding the Apollo 2 product in future quarters," stated Daniel Chen,
 chairman and interim CEO of Integrated Telecom Express. "Market adoption of
 our next-generation Apollo 3 is proceeding as are our new product development
 and introduction activities."
     Integrated Telecom Express is scheduled to release full unaudited
 first quarter financial results in late April or early May, and expects to
 provide further guidance on the current fiscal year's outlook at that time.
 
     About ITeX
     Integrated Telecom Express, Inc., headquartered in San Jose, California,
 designs, manufactures and markets ADSL Customer Premises Equipment (CPE) and
 Central Office (CO) integrated circuits and software solutions. ITeX products
 include analog and digital semiconductor devices with operating system drivers
 and network protocol software. ITeX is a contributing member of the standards
 bodies including DSL Forum, OpenDSL, ITU and T1E1. ITeX is also a member of
 the University of New Hampshire InterOperability Laboratory (UNH-IOL), where
 it has demonstrated interoperability with equipment from all major Digital
 Subscriber Line Access Multiplexer (DSLAM) vendors. Further information about
 ITeX is available on the Internet at http://www.itexinc.com .
 
     Forward-Looking Statements
     The foregoing statements regarding the Company's anticipated financial
 results for the first quarter of 2001, the anticipated amount of the reserve
 taken in the first quarter for Apollo 2 purchase commitments, the Company's
 expectation that Apollo 2 component inventory charges will not impact future
 quarters, adoption of the Apollo 3, future product development and
 introduction activities, and the release of the Company's full unaudited first
 quarter financial results and guidance on the current fiscal year's outlook
 are forward-looking in nature and subject to risks and uncertainties that may
 cause actual results to differ materially. Potential risks and uncertainties
 include the impact of closing entries and other accounting adjustments to
 first quarter 2001 results, the Company's ability to successfully transition
 customers from the Apollo 2 to the Apollo 3 chipset, changes in demand for the
 Apollo 2 and Apollo 3 chipsets, the direction and success of research and
 development efforts, changes in technology and the telecommunications market,
 competition, and changes in demand for the Company's products. The Company
 also refers readers to the risk factors identified in its Annual Report on
 Form 10-K for the year ended December 31, 2000 filed with the Securities and
 Exchange Commission.
 
 SOURCE  Integrated Telecom Express, Inc.