Netopia Announces Second Quarter Fiscal Year 2001 Results

Broadband Equipment Revenue Increases 12% Sequentially Over Prior Quarter



Apr 26, 2001, 01:00 ET from Netopia, Inc.

    ALAMEDA, Calif., April 26 /PRNewswire/ -- Netopia, Inc. (Nasdaq: NTPA), a
 market leader in providing broadband Internet equipment and Web Platforms
 designed for small and medium size enterprises, today announced results for
 the fiscal second quarter. Revenues for the fiscal second quarter ended March
 31, 2001 were $20.8 million, compared to $21.8 million for the same period in
 the prior fiscal year.  Within Internet equipment, broadband product revenues
 grew to $14.5 million, 16% growth over the same period in the prior fiscal
 year and 12% growth on a sequential basis from the quarter ended
 December 31, 2000.
     Pro forma results (which exclude amortization of goodwill and other
 intangible assets, acquired in-process R&D, and other non-recurring items) for
 the fiscal second quarter were a loss of ($1.8) million or ($0.10) per share,
 compared to pro forma income of $953,000 or $0.05 per share for the same
 period in the prior fiscal year.
     "The second quarter remained challenging," said Alan Lefkof, President and
 CEO of Netopia.  "However, during the quarter we demonstrated our commitment
 to expanding our product offerings and distribution channels by delivering new
 DSL Internet equipment products.  Furthermore, Verizon and BellSouth
 successfully launched new services using the enhanced Netopia Web Platform.
     "We continue to focus on the strong demand for broadband and eBusiness
 services from small and medium size enterprises," said Lefkof.  "While near
 term economic conditions will continue to be difficult, we believe we have the
 capital resources and experience to execute our business strategy and enhance
 shareholder value going forward."
     The net loss on a GAAP basis for the fiscal second quarter ended
 March 31, 2001 was ($8.5) million or ($0.48) per share, compared to a net loss
 of ($4.1) million or ($0.25) per share for the same period in the prior fiscal
 year.  As the Company announced on March 23, 2001, Netopia and Proxim mutually
 agreed to terminate their merger agreement.  In connection with the
 termination, Netopia incurred a one-time charge of $2.6 million.  The Company
 also incurred a one-time restructuring charge of $1.1 million related to staff
 reductions and costs of exiting certain business activities.
 
     Recent Announcements:
     During the quarter, Netopia continued to enhance its broadband Internet
 equipment and Web Platform product lines. Significant announcements from the
 Company include:
 
     -- Netopia Announces New 4500 Family of DSL Routers 4/11/01
     -- Netopia's New eBusiness Suite Delivers Modular Software
        Solutions 4/09/01
     -- Netopia Creates DSL Resource Center to Help Customers Navigate
        Service Provider Transitions 4/06/01
     -- Netopia and BellSouth(R) Realpages.com(SM) Partner to Provide
        E-Business Solutions to Small and Medium Size Businesses 1/30/01
     -- Netopia and Tdsoft Announce Certification of Netopia's 4700 Series of
        Integrated Access Devices with Tdsoft's VoNGATE Voice Access
        Gateway 1/23/01
     -- Netopia Announces License Agreement with Verizon Information
        Services 1/16/01
 
     Note:  Netopia will provide a live Webcast of the conference call for its
 fiscal second quarter earnings release.  The conference call will take place
 at 5:00 p.m. Eastern/2:00 p.m. Pacific on Thursday, April 26, 2001.  To listen
 to the call, go to Netopia's Web site, www.netopia.com and click on the
 Webcast link.  You will need RealPlayer software, which can be downloaded free
 from www.real.com/products/player/index.html ; and a 28.8 Kbps or faster
 Internet connection.  The call will be archived and available on Netopia's Web
 site for one week.
 
     About Netopia
     Netopia, Inc. develops, markets and supports broadband Internet equipment
 and Web Platforms designed for small and medium size enterprises.  Netopia's
 technology platforms enable carriers and service providers to create and offer
 value-added, bundled service offerings for their small and medium size
 enterprise customers.  These bundled service offerings often include DSL
 service bundled with backup, bonding, VPN, voice over DSL, and eSite and
 eStore hosting.
     Netopia's broadband equipment is interoperable with all major central
 office equipment suppliers, including Alcatel, Cisco, Copper Mountain
 Networks, Ericsson, Lucent Technologies, Nokia, Orckit, Paradyne, Siemens, and
 Zhone Technologies.  Netopia has established strategic distribution
 relationships with leading carriers and service providers including BellSouth,
 Covad Communications, Earthlink Network, Everdream, France Telecom, MegaPath
 Networks, Network Telephone, Rhythms NetConnections, Telecom Italia, UUNet,
 Verio, Verizon, and XO Communications.
     Headquartered in Alameda, Calif., Netopia's common stock trades on The
 Nasdaq Stock Market(R) under the symbol "NTPA."  Further information about
 Netopia can be obtained via phone 510-814-5100, fax 510-814-5021 or on the Web
 at www.netopia.com.
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
     of 1995:
     Portions of this release that are not statements of historical fact may
 include forward-looking statements.  Statements regarding Netopia, Inc.'s
 beliefs, plans, expectations or intentions regarding the future are
 forward-looking statements, within the meaning of Section 27A of the
 Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
 Act of 1934, as amended.  All such forward-looking statements are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Netopia, Inc.'s actual results could differ materially.
 Factors that might cause a difference include, but are not limited to:
 Netopia's continued ability to form key relationships for its DSL and other
 broadband Internet equipment and for its Web Platform products; its ability to
 enter into new distribution partnerships; its ability to develop new DSL,
 broadband and Web Platform products in a timely manner; market acceptance of
 Netopia's products; the pace of development and market acceptance of Netopia's
 products and the market for DSL, broadband and Web Platform products
 generally; the ability of ISPs, CLECs and other carriers to obtain adequate
 financing; competitive pricing pressures; the uncertainties associated with
 international operations; intense competition from third parties offering
 competitive DSL, broadband and Web Platform products; and economic conditions
 generally.  In addition, prior period-to-period comparisons of revenues are
 not necessarily indicative of period-to-period comparative revenues in future
 periods.  Prospective investors are cautioned not to place undue reliance on
 any such forward-looking statements.  Further, Netopia expressly disclaims any
 obligation to revise or update any of the forward-looking statements contained
 herein to reflect future events or developments after the date hereof.  For
 more information concerning Netopia and risk factors that may affect Netopia's
 future results and may cause actual results to vary from results anticipated
 in forward-looking statements, investors should review Netopia's public
 filings with the United States Securities and Exchange Commission, which are
 available by calling Netopia at 510-814-5260 or online at www.sec.gov.
 
      Press Contact
      Angela Schaefer
      Public Relations Manager
      Netopia, Inc.
      2470 Mariner Square Loop
      Alameda, CA 94501
      Phone:  510-814-5309
      Fax:  510-814-5021
      angelas@netopia.com
 
 
     Pro Forma Statement of Operations - Three and Six Months Ended March 31
 
         Excludes Amortization of Goodwill and Other Intangibles, Acquired
         In-Process Research and Development, and Other Non-Recurring Items
 
                                Three months ended          Six months ended
                                    March 31,                  March 31,
 
                                     2001*     2000**        2001*    2000**
                                 (in thousands, except for per share amounts)
     Revenues:
      Internet equipment           $16,458    $15,660      $31,303   $26,499
      Web platform licenses
       and services                  4,370      6,136        9,918    11,589
        Total revenues              20,828     21,796       41,221    38,088
 
     Cost of revenues:
      Internet equipment            10,845     10,879       20,640    18,488
      Web platform licenses
       and services                    225        124          426       246
        Total cost of revenues      11,070     11,003       21,066    18,734
 
      Gross profit                   9,758     10,793       20,155    19,354
 
     Operating expenses:
      Research and development       3,263      3,143        6,932     6,141
      Selling and marketing          7,504      6,272       14,689    11,919
      General and administrative     1,360      1,317        2,666     2,293
      Special provision for
       doubtful accounts                --         --        1,837        --
        Total operating expenses    12,127     10,732       26,124    20,353
        Operating income (loss)    (2,369)         61      (5,969)     (999)
     Other income, net                 588        892        1,561     1,720
       Income (loss) before
        income taxes               (1,781)        953      (4,408)       721
     Income tax provision               --         --           --        --
 
        Pro forma income (loss)   $(1,781)       $953     $(4,408)      $721
 
     Per share data, pro forma
      income (loss):
      Basic pro forma income
       (loss) per share            $(0.10)      $0.06      $(0.25)     $0.04
      Diluted pro forma
       income (loss) per share     $(0.10)      $0.05      $(0.25)     $0.04
      Shares used in the basic
       per share calculations       17,819     16,564       17,712    16,304
      Shares used in the
       diluted per share
       calculations                 17,819     19,499       17,712    19,266
 
     * The pro forma amounts for the three and six months ended March 31, 2001
     have been adjusted to eliminate: $3.0 million and $6.0 million,
     respectively, in amortization of goodwill and other intangible assets
     related to the acquisitions of WebOrder, StarNet, Serus, and netOctopus;
     $19,000 and $1.0 million, respectively, in losses related to impaired
     securities; $1.1 million of non-recurring costs related to a restructuring
     of certain of Netopia's operations; and $2.6 million of non-recurring
     costs related to the termination of the merger agreement between Netopia
     and Proxim. Additionally, the pro forma amounts for the six months ended
     March 31, 2001 have been adjusted to eliminate $1.6 million in cumulative
     effect from the adoption of Staff Accounting Bulletin 101.
 
     ** The pro forma amounts for the three and six months ended March 31, 2000
     have been adjusted to eliminate: $3.0 million and $8.7 million,
     respectively, in write-offs of acquired in-process research and
     development related to the acquisitions of WebOrder and StarNet; and,
     $2.0 million and $3.7 million, respectively, in amortization of goodwill
     and other intangible assets related to the acquisitions of WebOrder,
     StarNet, Serus, and netOctopus. Additionally, the pro forma amounts for
     the six months ended March 31, 2000 have been adjusted to eliminate
     $1.1 million of gain on sale of discontinued operations.
 
 
 
         GAAP Statement of Operations - Three and Six Months Ended March 31
 
                                    Three months ended      Six months ended
                                         March 31,             March 31,
                                    2001        2000       2001         2000
                                  (in thousands, except for per share amounts)
     Revenues:
      Internet equipment         $16,458     $15,660    $31,303      $26,499
      Web platform licenses
       and services                4,370       6,136      9,918       11,589
        Total revenues            20,828      21,796     41,221       38,088
 
     Cost of revenues:
      Internet equipment          10,845      10,879     20,640       18,488
      Web platform licenses
       and services                  225         124        426          246
        Total cost of revenues    11,070      11,003     21,066       18,734
 
     Gross profit                  9,758      10,793     20,155       19,354
 
     Operating expenses:
      Research and development     3,263       3,143      6,932        6,141
      Selling and marketing        7,504       6,272     14,689       11,919
      General and administrative   1,360       1,317      4,503        2,293
      Restructuring costs          1,073          --      1,073           --
      Terminated merger costs      2,640           -      2,640           --
      Acquired in-process
       research and development       --       2,990         --        8,658
      Amortization of goodwill
       and other intangible
       assets                      2,996       2,038      5,992        3,747
        Total operating
         expenses                 18,836      15,760     35,829       32,758
 
     Operating loss              (9,078)     (4,967)   (15,674)     (13,404)
 
     Other income (loss):
      Loss on impaired securities   (19)          --    (1,000)           --
      Other income, net              588         892      1,561        1,720
        Total other income           569         892        561        1,720
 
      Loss from continuing
       operations before
       cumulative effect from
       adoption of Staff
       Accounting Bulletin 101
       and before gain on sale
       of discontinued operations,
       net of taxes              (8,509)     (4,075)   (15,113)     (11,684)
 
     Cumulative effect from
      adoption of Staff
      Accounting Bulletin 101         --          --    (1,555)           --
 
     Gain on sale of
      discontinued operation,
      net of taxes                    --          --         --        1,147
 
     Net loss                   $(8,509)    $(4,075)  $(16,668)    $(10,537)
 
     Per share data, net loss:
     Net loss per share          $(0.48)     $(0.25)    $(0.94)      $(0.65)
     Shares used in the
      per share calculations      17,819      16,564     17,712       16,304
 
 
                       Condensed Consolidated Balance Sheets
 
                                               March 31,       September 30,
                                                  2001              2000
                                              (unaudited)
                                                    (in thousands)
                            ASSETS
     Current assets
      Cash and short-term investments           $50,808           $59,777
      Trade receivables, net                     13,121            15,646
      Inventories, net                           10,255            10,284
      Prepaid expenses and other
       current assets                             1,526             2,341
        Total current assets                     75,710            88,048
 
     Furniture, fixtures and equipment, net       5,749             4,469
     Acquisition of technologies                 25,125            31,016
     Long term investments                        4,000             2,493
     Deposits and other assets                    2,389             2,347
        Total assets                           $112,973          $128,373
 
          LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities                        $15,282           $15,756
     Long-term liabilities                          188               328
        Total liabilities                        15,470            16,084
 
     Stockholders' equity                        97,503           112,289
         Total liabilities and
          stockholders' equity                 $112,973          $128,373
 
 
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SOURCE Netopia, Inc.
    ALAMEDA, Calif., April 26 /PRNewswire/ -- Netopia, Inc. (Nasdaq: NTPA), a
 market leader in providing broadband Internet equipment and Web Platforms
 designed for small and medium size enterprises, today announced results for
 the fiscal second quarter. Revenues for the fiscal second quarter ended March
 31, 2001 were $20.8 million, compared to $21.8 million for the same period in
 the prior fiscal year.  Within Internet equipment, broadband product revenues
 grew to $14.5 million, 16% growth over the same period in the prior fiscal
 year and 12% growth on a sequential basis from the quarter ended
 December 31, 2000.
     Pro forma results (which exclude amortization of goodwill and other
 intangible assets, acquired in-process R&D, and other non-recurring items) for
 the fiscal second quarter were a loss of ($1.8) million or ($0.10) per share,
 compared to pro forma income of $953,000 or $0.05 per share for the same
 period in the prior fiscal year.
     "The second quarter remained challenging," said Alan Lefkof, President and
 CEO of Netopia.  "However, during the quarter we demonstrated our commitment
 to expanding our product offerings and distribution channels by delivering new
 DSL Internet equipment products.  Furthermore, Verizon and BellSouth
 successfully launched new services using the enhanced Netopia Web Platform.
     "We continue to focus on the strong demand for broadband and eBusiness
 services from small and medium size enterprises," said Lefkof.  "While near
 term economic conditions will continue to be difficult, we believe we have the
 capital resources and experience to execute our business strategy and enhance
 shareholder value going forward."
     The net loss on a GAAP basis for the fiscal second quarter ended
 March 31, 2001 was ($8.5) million or ($0.48) per share, compared to a net loss
 of ($4.1) million or ($0.25) per share for the same period in the prior fiscal
 year.  As the Company announced on March 23, 2001, Netopia and Proxim mutually
 agreed to terminate their merger agreement.  In connection with the
 termination, Netopia incurred a one-time charge of $2.6 million.  The Company
 also incurred a one-time restructuring charge of $1.1 million related to staff
 reductions and costs of exiting certain business activities.
 
     Recent Announcements:
     During the quarter, Netopia continued to enhance its broadband Internet
 equipment and Web Platform product lines. Significant announcements from the
 Company include:
 
     -- Netopia Announces New 4500 Family of DSL Routers 4/11/01
     -- Netopia's New eBusiness Suite Delivers Modular Software
        Solutions 4/09/01
     -- Netopia Creates DSL Resource Center to Help Customers Navigate
        Service Provider Transitions 4/06/01
     -- Netopia and BellSouth(R) Realpages.com(SM) Partner to Provide
        E-Business Solutions to Small and Medium Size Businesses 1/30/01
     -- Netopia and Tdsoft Announce Certification of Netopia's 4700 Series of
        Integrated Access Devices with Tdsoft's VoNGATE Voice Access
        Gateway 1/23/01
     -- Netopia Announces License Agreement with Verizon Information
        Services 1/16/01
 
     Note:  Netopia will provide a live Webcast of the conference call for its
 fiscal second quarter earnings release.  The conference call will take place
 at 5:00 p.m. Eastern/2:00 p.m. Pacific on Thursday, April 26, 2001.  To listen
 to the call, go to Netopia's Web site, www.netopia.com and click on the
 Webcast link.  You will need RealPlayer software, which can be downloaded free
 from www.real.com/products/player/index.html ; and a 28.8 Kbps or faster
 Internet connection.  The call will be archived and available on Netopia's Web
 site for one week.
 
     About Netopia
     Netopia, Inc. develops, markets and supports broadband Internet equipment
 and Web Platforms designed for small and medium size enterprises.  Netopia's
 technology platforms enable carriers and service providers to create and offer
 value-added, bundled service offerings for their small and medium size
 enterprise customers.  These bundled service offerings often include DSL
 service bundled with backup, bonding, VPN, voice over DSL, and eSite and
 eStore hosting.
     Netopia's broadband equipment is interoperable with all major central
 office equipment suppliers, including Alcatel, Cisco, Copper Mountain
 Networks, Ericsson, Lucent Technologies, Nokia, Orckit, Paradyne, Siemens, and
 Zhone Technologies.  Netopia has established strategic distribution
 relationships with leading carriers and service providers including BellSouth,
 Covad Communications, Earthlink Network, Everdream, France Telecom, MegaPath
 Networks, Network Telephone, Rhythms NetConnections, Telecom Italia, UUNet,
 Verio, Verizon, and XO Communications.
     Headquartered in Alameda, Calif., Netopia's common stock trades on The
 Nasdaq Stock Market(R) under the symbol "NTPA."  Further information about
 Netopia can be obtained via phone 510-814-5100, fax 510-814-5021 or on the Web
 at www.netopia.com.
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
     of 1995:
     Portions of this release that are not statements of historical fact may
 include forward-looking statements.  Statements regarding Netopia, Inc.'s
 beliefs, plans, expectations or intentions regarding the future are
 forward-looking statements, within the meaning of Section 27A of the
 Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
 Act of 1934, as amended.  All such forward-looking statements are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Netopia, Inc.'s actual results could differ materially.
 Factors that might cause a difference include, but are not limited to:
 Netopia's continued ability to form key relationships for its DSL and other
 broadband Internet equipment and for its Web Platform products; its ability to
 enter into new distribution partnerships; its ability to develop new DSL,
 broadband and Web Platform products in a timely manner; market acceptance of
 Netopia's products; the pace of development and market acceptance of Netopia's
 products and the market for DSL, broadband and Web Platform products
 generally; the ability of ISPs, CLECs and other carriers to obtain adequate
 financing; competitive pricing pressures; the uncertainties associated with
 international operations; intense competition from third parties offering
 competitive DSL, broadband and Web Platform products; and economic conditions
 generally.  In addition, prior period-to-period comparisons of revenues are
 not necessarily indicative of period-to-period comparative revenues in future
 periods.  Prospective investors are cautioned not to place undue reliance on
 any such forward-looking statements.  Further, Netopia expressly disclaims any
 obligation to revise or update any of the forward-looking statements contained
 herein to reflect future events or developments after the date hereof.  For
 more information concerning Netopia and risk factors that may affect Netopia's
 future results and may cause actual results to vary from results anticipated
 in forward-looking statements, investors should review Netopia's public
 filings with the United States Securities and Exchange Commission, which are
 available by calling Netopia at 510-814-5260 or online at www.sec.gov.
 
      Press Contact
      Angela Schaefer
      Public Relations Manager
      Netopia, Inc.
      2470 Mariner Square Loop
      Alameda, CA 94501
      Phone:  510-814-5309
      Fax:  510-814-5021
      angelas@netopia.com
 
 
     Pro Forma Statement of Operations - Three and Six Months Ended March 31
 
         Excludes Amortization of Goodwill and Other Intangibles, Acquired
         In-Process Research and Development, and Other Non-Recurring Items
 
                                Three months ended          Six months ended
                                    March 31,                  March 31,
 
                                     2001*     2000**        2001*    2000**
                                 (in thousands, except for per share amounts)
     Revenues:
      Internet equipment           $16,458    $15,660      $31,303   $26,499
      Web platform licenses
       and services                  4,370      6,136        9,918    11,589
        Total revenues              20,828     21,796       41,221    38,088
 
     Cost of revenues:
      Internet equipment            10,845     10,879       20,640    18,488
      Web platform licenses
       and services                    225        124          426       246
        Total cost of revenues      11,070     11,003       21,066    18,734
 
      Gross profit                   9,758     10,793       20,155    19,354
 
     Operating expenses:
      Research and development       3,263      3,143        6,932     6,141
      Selling and marketing          7,504      6,272       14,689    11,919
      General and administrative     1,360      1,317        2,666     2,293
      Special provision for
       doubtful accounts                --         --        1,837        --
        Total operating expenses    12,127     10,732       26,124    20,353
        Operating income (loss)    (2,369)         61      (5,969)     (999)
     Other income, net                 588        892        1,561     1,720
       Income (loss) before
        income taxes               (1,781)        953      (4,408)       721
     Income tax provision               --         --           --        --
 
        Pro forma income (loss)   $(1,781)       $953     $(4,408)      $721
 
     Per share data, pro forma
      income (loss):
      Basic pro forma income
       (loss) per share            $(0.10)      $0.06      $(0.25)     $0.04
      Diluted pro forma
       income (loss) per share     $(0.10)      $0.05      $(0.25)     $0.04
      Shares used in the basic
       per share calculations       17,819     16,564       17,712    16,304
      Shares used in the
       diluted per share
       calculations                 17,819     19,499       17,712    19,266
 
     * The pro forma amounts for the three and six months ended March 31, 2001
     have been adjusted to eliminate: $3.0 million and $6.0 million,
     respectively, in amortization of goodwill and other intangible assets
     related to the acquisitions of WebOrder, StarNet, Serus, and netOctopus;
     $19,000 and $1.0 million, respectively, in losses related to impaired
     securities; $1.1 million of non-recurring costs related to a restructuring
     of certain of Netopia's operations; and $2.6 million of non-recurring
     costs related to the termination of the merger agreement between Netopia
     and Proxim. Additionally, the pro forma amounts for the six months ended
     March 31, 2001 have been adjusted to eliminate $1.6 million in cumulative
     effect from the adoption of Staff Accounting Bulletin 101.
 
     ** The pro forma amounts for the three and six months ended March 31, 2000
     have been adjusted to eliminate: $3.0 million and $8.7 million,
     respectively, in write-offs of acquired in-process research and
     development related to the acquisitions of WebOrder and StarNet; and,
     $2.0 million and $3.7 million, respectively, in amortization of goodwill
     and other intangible assets related to the acquisitions of WebOrder,
     StarNet, Serus, and netOctopus. Additionally, the pro forma amounts for
     the six months ended March 31, 2000 have been adjusted to eliminate
     $1.1 million of gain on sale of discontinued operations.
 
 
 
         GAAP Statement of Operations - Three and Six Months Ended March 31
 
                                    Three months ended      Six months ended
                                         March 31,             March 31,
                                    2001        2000       2001         2000
                                  (in thousands, except for per share amounts)
     Revenues:
      Internet equipment         $16,458     $15,660    $31,303      $26,499
      Web platform licenses
       and services                4,370       6,136      9,918       11,589
        Total revenues            20,828      21,796     41,221       38,088
 
     Cost of revenues:
      Internet equipment          10,845      10,879     20,640       18,488
      Web platform licenses
       and services                  225         124        426          246
        Total cost of revenues    11,070      11,003     21,066       18,734
 
     Gross profit                  9,758      10,793     20,155       19,354
 
     Operating expenses:
      Research and development     3,263       3,143      6,932        6,141
      Selling and marketing        7,504       6,272     14,689       11,919
      General and administrative   1,360       1,317      4,503        2,293
      Restructuring costs          1,073          --      1,073           --
      Terminated merger costs      2,640           -      2,640           --
      Acquired in-process
       research and development       --       2,990         --        8,658
      Amortization of goodwill
       and other intangible
       assets                      2,996       2,038      5,992        3,747
        Total operating
         expenses                 18,836      15,760     35,829       32,758
 
     Operating loss              (9,078)     (4,967)   (15,674)     (13,404)
 
     Other income (loss):
      Loss on impaired securities   (19)          --    (1,000)           --
      Other income, net              588         892      1,561        1,720
        Total other income           569         892        561        1,720
 
      Loss from continuing
       operations before
       cumulative effect from
       adoption of Staff
       Accounting Bulletin 101
       and before gain on sale
       of discontinued operations,
       net of taxes              (8,509)     (4,075)   (15,113)     (11,684)
 
     Cumulative effect from
      adoption of Staff
      Accounting Bulletin 101         --          --    (1,555)           --
 
     Gain on sale of
      discontinued operation,
      net of taxes                    --          --         --        1,147
 
     Net loss                   $(8,509)    $(4,075)  $(16,668)    $(10,537)
 
     Per share data, net loss:
     Net loss per share          $(0.48)     $(0.25)    $(0.94)      $(0.65)
     Shares used in the
      per share calculations      17,819      16,564     17,712       16,304
 
 
                       Condensed Consolidated Balance Sheets
 
                                               March 31,       September 30,
                                                  2001              2000
                                              (unaudited)
                                                    (in thousands)
                            ASSETS
     Current assets
      Cash and short-term investments           $50,808           $59,777
      Trade receivables, net                     13,121            15,646
      Inventories, net                           10,255            10,284
      Prepaid expenses and other
       current assets                             1,526             2,341
        Total current assets                     75,710            88,048
 
     Furniture, fixtures and equipment, net       5,749             4,469
     Acquisition of technologies                 25,125            31,016
     Long term investments                        4,000             2,493
     Deposits and other assets                    2,389             2,347
        Total assets                           $112,973          $128,373
 
          LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities                        $15,282           $15,756
     Long-term liabilities                          188               328
        Total liabilities                        15,470            16,084
 
     Stockholders' equity                        97,503           112,289
         Total liabilities and
          stockholders' equity                 $112,973          $128,373
 
 
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 SOURCE  Netopia, Inc.