Sunrise Telecom Reports First Quarter 2001 Financial Results

Company Posts Comparative Quarter-Over-Quarter Revenue Growth of 13 Percent



Apr 26, 2001, 01:00 ET from Sunrise Telecom Incorporated

    SAN JOSE, Calif., April 26 /PRNewswire/ --
 Sunrise Telecom Incorporated (Nasdaq:   SRTI), a leading provider of service
 verification equipment for telecommunications and Internet networks, today
 reported financial results for the first quarter ended March 31, 2001.
 
      Summary of Financial Results
      (In thousands, except per share data)
 
                                     For the Three Months Ended
                                    Mar. 31,            Mar. 31,
                                      2001               2000
 
     Net sales                      $22,453             $19,791
     Operating income (A)            $3,284              $4,969
     Pro forma net income (A)        $3,349              $3,408
     Pro forma EPS (diluted) (A)      $0.07               $0.07
     Shares outstanding (diluted)    51,277              47,032
 
     (A)  Adjusted to exclude non-cash charges related to the amortization of
          goodwill and deferred stock-based compensation. Including these
          charges, operating income was $1,464 and $4,334, net income was
          $1,529 and $2,773 and diluted earnings per share were $0.03 and $0.06
          in the three month periods presented.
 
     For the first quarter of 2001, Sunrise posted net sales of $22.5 million,
 an increase of 13% over net sales of $19.8 million for the first quarter of
 the prior year. Pro forma net income excluding non-cash charges was $3.4
 million for the period or $0.07 per diluted share, similar to $3.4 million or
 $0.07 per diluted share for the same period in the prior year. Net income
 including non-cash charges for the first quarter of 2001 was $1.5 million or
 $0.03 per diluted share, compared with $2.8 million, or $0.06 per diluted
 share, for the same period in the prior year. Net income as a percentage of
 net sales, excluding non-cash charges, was 15% for the first quarter of 2001
 compared to 17% in the prior year. Gross margin was 69% in the first quarter
 of 2001 compared to 72% for the first quarter in 2000.
     "The year 2001 is clearly a challenge for the telecommunication industry,
 yet we still believe that consumer demand for faster and more reliable
 broadband access will continue," said Paul Chang, President and Chief
 Executive Officer of Sunrise Telecom Incorporated. "Our unique testing
 solutions and our successful penetration of new markets enabled us to continue
 to deliver fundamentally sound financial performance for the first quarter of
 2001. We are committed to successfully manage through this challenging
 economic environment by focusing on our customers, managing our business
 conservatively, and continuing to invest in R&D. We are building a business
 for the long term, and we believe we are well positioned to continue to
 deliver as economic conditions improve."
 
     Highlights during the First Quarter of 2001 include:
 
     -- Shipments of our fiber optics handheld OC-48 test set and international
        STM-4 optical test set.
     -- Introduction of the Modular Testing Tool Kit to the SunSet xDSL test
        set.
     -- Acquisition of Avantron Technologies, further expanding our cable
        verification product offerings.
     -- Completion of our new facility.
 
     About Sunrise Telecom Incorporated
     Sunrise Telecom manufactures and markets service verification equipment to
 pre-qualify, verify, and diagnose telecommunications and Internet networks.
 Sunrise Telecom's products offer broad functionality, leading-edge technology,
 and compact size to test the variety of new DSL services, fiber optics, cable
 TV networks, and signaling networks. The products are designed to maximize
 technicians' effectiveness in the field and to provide realistic network
 simulations for equipment manufacturers to test their products. The company
 was founded in 1991 and is based in San Jose, California. Sunrise Telecom
 distributes its products through a network of sales representatives,
 distributors, and a direct sales force throughout six continents.
     Sunrise Telecom, SunSet, SunLite, and Advanced Central Office Analyzer are
 trademarks of Sunrise Telecom Incorporated. All other trade, product, or
 service names referenced in this release may be trademarks or registered
 trademarks of their respective holders.
     Except for historical information, the matters discussed in this press
 release are forward-looking statements that are subject to certain risks and
 uncertainties that could cause actual results to differ materially from those
 projected. Such factors include: any downturn in the demand for our products;
 the mix of products our customers order; failure of OEM products to lower
 sales costs; quarterly fluctuations in our operating results; our dependence
 on a limited number of major customers; our dependence on DSL; delays in
 product development and delivery schedules; deferred or lost sales resulting
 from our lengthy sales cycle; possible shutdowns in our manufacturing
 operations as a result of electricity blackouts in California; our ability to
 integrate acquisitions; any prolonged slowdown in the growth of the
 telecommunications industry; increased competitive pressures; the loss of key
 personnel; our ability to enter into strategic relationships; rapid
 technological change within the telecommunications industry; our dependence on
 limited source suppliers; special risks associated with international
 operations; control by our founding shareholders; as well as the risk factors
 listed from time to time in the Company's SEC reports, including but not
 limited to our Form 10-K for the year ended December 31, 2000, copies of which
 are available from the Company's Investor Relations Department. The Company
 assumes no obligation to update the forward-looking statements included in
 this press release.
 
                            -Financial Tables Below-
 
                          SUNRISE TELECOM INCORPORATED
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                (In thousands, except share and per share data)
 
                                                     March 31,    December 31,
                                                       2001            2000
                     ASSETS
 
     Current assets:
      Cash and cash equivalents                        $37,449        $56,298
      Investment in marketable debt securities           4,581          6,300
      Accounts receivable, net                          15,567         18,419
      Inventories                                       14,366         13,330
      Prepaid expenses and other assets                    825          1,748
      Deferred tax assets                                2,401          4,245
        Total current assets                            75,189        100,340
     Property and equipment, net                        27,820          8,580
     Intangible assets, net                             20,602         11,725
     Deferred tax assets                                 1,554            799
     Other assets                                        1,397          4,112
     Total assets                                     $126,562       $125,556
 
                    LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
      Accounts payable                                  $2,788         $2,578
      Current portion of notes payable                     490            780
      Other accrued expenses                            12,329         12,581
      Income taxes payable                               1,232          1,888
      Deferred revenue                                     424            546
        Total current liabilities                       17,263         18,373
     Notes payable, less current portion                   913          1,047
     Other liabilities                                     716            492
     Stockholders' equity:
       Common stock, $0.001 par value per share;
        175,000,000 shares authorized;                      50             50
        50,004,000 and 49,941,000 shares issued and
        outstanding, respectively
       Additional paid-in capital                       68,408         68,317
       Deferred stock-based compensation                (6,067)        (6,611)
       Retained earrings                                45,490         43,961
       Accumulated other comprehensive loss               (211)           (73)
     Total stockholders' equity                        107,670        105,644
     Total liabilities and stockholders' equity        126,562        125,556
 
 
                          SUNRISE TELECOM INCORPORATED
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
 
                                                           Three Months
                                                          Ended March 31,
                                                        2001           2000
     Net sales                                        $22,453        $19,791
     Cost of sales (exclusive of non-cash)
      amortization charges of $74 and $39,
       respectively)                                    6,930          5,549
     Amortization of deferred stock-based
      compensation                                         74             39
       Gross profit                                    15,449         14,203
     Operating expenses:
      Research and development (exclusive of non-cash
       amortization charges of $212 and $136,
       respectively)                                    4,822          3,218
      Selling and marketing (exclusive of non-cash
       amortization charges of $165 and $88,
       respectively)                                    5,202          4,990
      General and administrative
       (exclusive of non-cash
       amortization charges of $1,369 and $372,
       respectively)                                    2,215          1,065
      Amortization of goodwill and
       other intangible assets                          1,275            324
      Amortization of deferred stock-based
        compensation                                      471            272
       Total operating expenses                        13,985          9,869
       Income from operations                           1,464          4,334
     Other income, net                                    925            138
       Income before income taxes                       2,389          4,472
     Income taxes                                         860          1,699
       Net income                                      $1,529         $2,773
 
     Earnings per share:
       Basic                                            $0.03          $0.06
       Diluted                                          $0.03          $0.06
 
     Shares used in per share computation:
       Basic                                           49,868         45,060
       Diluted                                         51,277         47,032
 
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SOURCE Sunrise Telecom Incorporated
    SAN JOSE, Calif., April 26 /PRNewswire/ --
 Sunrise Telecom Incorporated (Nasdaq:   SRTI), a leading provider of service
 verification equipment for telecommunications and Internet networks, today
 reported financial results for the first quarter ended March 31, 2001.
 
      Summary of Financial Results
      (In thousands, except per share data)
 
                                     For the Three Months Ended
                                    Mar. 31,            Mar. 31,
                                      2001               2000
 
     Net sales                      $22,453             $19,791
     Operating income (A)            $3,284              $4,969
     Pro forma net income (A)        $3,349              $3,408
     Pro forma EPS (diluted) (A)      $0.07               $0.07
     Shares outstanding (diluted)    51,277              47,032
 
     (A)  Adjusted to exclude non-cash charges related to the amortization of
          goodwill and deferred stock-based compensation. Including these
          charges, operating income was $1,464 and $4,334, net income was
          $1,529 and $2,773 and diluted earnings per share were $0.03 and $0.06
          in the three month periods presented.
 
     For the first quarter of 2001, Sunrise posted net sales of $22.5 million,
 an increase of 13% over net sales of $19.8 million for the first quarter of
 the prior year. Pro forma net income excluding non-cash charges was $3.4
 million for the period or $0.07 per diluted share, similar to $3.4 million or
 $0.07 per diluted share for the same period in the prior year. Net income
 including non-cash charges for the first quarter of 2001 was $1.5 million or
 $0.03 per diluted share, compared with $2.8 million, or $0.06 per diluted
 share, for the same period in the prior year. Net income as a percentage of
 net sales, excluding non-cash charges, was 15% for the first quarter of 2001
 compared to 17% in the prior year. Gross margin was 69% in the first quarter
 of 2001 compared to 72% for the first quarter in 2000.
     "The year 2001 is clearly a challenge for the telecommunication industry,
 yet we still believe that consumer demand for faster and more reliable
 broadband access will continue," said Paul Chang, President and Chief
 Executive Officer of Sunrise Telecom Incorporated. "Our unique testing
 solutions and our successful penetration of new markets enabled us to continue
 to deliver fundamentally sound financial performance for the first quarter of
 2001. We are committed to successfully manage through this challenging
 economic environment by focusing on our customers, managing our business
 conservatively, and continuing to invest in R&D. We are building a business
 for the long term, and we believe we are well positioned to continue to
 deliver as economic conditions improve."
 
     Highlights during the First Quarter of 2001 include:
 
     -- Shipments of our fiber optics handheld OC-48 test set and international
        STM-4 optical test set.
     -- Introduction of the Modular Testing Tool Kit to the SunSet xDSL test
        set.
     -- Acquisition of Avantron Technologies, further expanding our cable
        verification product offerings.
     -- Completion of our new facility.
 
     About Sunrise Telecom Incorporated
     Sunrise Telecom manufactures and markets service verification equipment to
 pre-qualify, verify, and diagnose telecommunications and Internet networks.
 Sunrise Telecom's products offer broad functionality, leading-edge technology,
 and compact size to test the variety of new DSL services, fiber optics, cable
 TV networks, and signaling networks. The products are designed to maximize
 technicians' effectiveness in the field and to provide realistic network
 simulations for equipment manufacturers to test their products. The company
 was founded in 1991 and is based in San Jose, California. Sunrise Telecom
 distributes its products through a network of sales representatives,
 distributors, and a direct sales force throughout six continents.
     Sunrise Telecom, SunSet, SunLite, and Advanced Central Office Analyzer are
 trademarks of Sunrise Telecom Incorporated. All other trade, product, or
 service names referenced in this release may be trademarks or registered
 trademarks of their respective holders.
     Except for historical information, the matters discussed in this press
 release are forward-looking statements that are subject to certain risks and
 uncertainties that could cause actual results to differ materially from those
 projected. Such factors include: any downturn in the demand for our products;
 the mix of products our customers order; failure of OEM products to lower
 sales costs; quarterly fluctuations in our operating results; our dependence
 on a limited number of major customers; our dependence on DSL; delays in
 product development and delivery schedules; deferred or lost sales resulting
 from our lengthy sales cycle; possible shutdowns in our manufacturing
 operations as a result of electricity blackouts in California; our ability to
 integrate acquisitions; any prolonged slowdown in the growth of the
 telecommunications industry; increased competitive pressures; the loss of key
 personnel; our ability to enter into strategic relationships; rapid
 technological change within the telecommunications industry; our dependence on
 limited source suppliers; special risks associated with international
 operations; control by our founding shareholders; as well as the risk factors
 listed from time to time in the Company's SEC reports, including but not
 limited to our Form 10-K for the year ended December 31, 2000, copies of which
 are available from the Company's Investor Relations Department. The Company
 assumes no obligation to update the forward-looking statements included in
 this press release.
 
                            -Financial Tables Below-
 
                          SUNRISE TELECOM INCORPORATED
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                (In thousands, except share and per share data)
 
                                                     March 31,    December 31,
                                                       2001            2000
                     ASSETS
 
     Current assets:
      Cash and cash equivalents                        $37,449        $56,298
      Investment in marketable debt securities           4,581          6,300
      Accounts receivable, net                          15,567         18,419
      Inventories                                       14,366         13,330
      Prepaid expenses and other assets                    825          1,748
      Deferred tax assets                                2,401          4,245
        Total current assets                            75,189        100,340
     Property and equipment, net                        27,820          8,580
     Intangible assets, net                             20,602         11,725
     Deferred tax assets                                 1,554            799
     Other assets                                        1,397          4,112
     Total assets                                     $126,562       $125,556
 
                    LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
      Accounts payable                                  $2,788         $2,578
      Current portion of notes payable                     490            780
      Other accrued expenses                            12,329         12,581
      Income taxes payable                               1,232          1,888
      Deferred revenue                                     424            546
        Total current liabilities                       17,263         18,373
     Notes payable, less current portion                   913          1,047
     Other liabilities                                     716            492
     Stockholders' equity:
       Common stock, $0.001 par value per share;
        175,000,000 shares authorized;                      50             50
        50,004,000 and 49,941,000 shares issued and
        outstanding, respectively
       Additional paid-in capital                       68,408         68,317
       Deferred stock-based compensation                (6,067)        (6,611)
       Retained earrings                                45,490         43,961
       Accumulated other comprehensive loss               (211)           (73)
     Total stockholders' equity                        107,670        105,644
     Total liabilities and stockholders' equity        126,562        125,556
 
 
                          SUNRISE TELECOM INCORPORATED
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
 
                                                           Three Months
                                                          Ended March 31,
                                                        2001           2000
     Net sales                                        $22,453        $19,791
     Cost of sales (exclusive of non-cash)
      amortization charges of $74 and $39,
       respectively)                                    6,930          5,549
     Amortization of deferred stock-based
      compensation                                         74             39
       Gross profit                                    15,449         14,203
     Operating expenses:
      Research and development (exclusive of non-cash
       amortization charges of $212 and $136,
       respectively)                                    4,822          3,218
      Selling and marketing (exclusive of non-cash
       amortization charges of $165 and $88,
       respectively)                                    5,202          4,990
      General and administrative
       (exclusive of non-cash
       amortization charges of $1,369 and $372,
       respectively)                                    2,215          1,065
      Amortization of goodwill and
       other intangible assets                          1,275            324
      Amortization of deferred stock-based
        compensation                                      471            272
       Total operating expenses                        13,985          9,869
       Income from operations                           1,464          4,334
     Other income, net                                    925            138
       Income before income taxes                       2,389          4,472
     Income taxes                                         860          1,699
       Net income                                      $1,529         $2,773
 
     Earnings per share:
       Basic                                            $0.03          $0.06
       Diluted                                          $0.03          $0.06
 
     Shares used in per share computation:
       Basic                                           49,868         45,060
       Diluted                                         51,277         47,032
 
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                http://tbutton.prnewswire.com/prn/11690X35631388
 
 SOURCE  Sunrise Telecom Incorporated