AVICI SYSTEMS REVISES THIRD QUARTER ESTIMATES
N. Billerica, Mass., September 10, 2001 -- Avici Systems Inc. (Nasdaq: AVCI), a leading provider of scalable core routing solutions for IP-over-optical networks, today revised its estimates for the quarter ending September 30, 2001, due to market conditions resulting in lower than anticipated customer orders.
Avici Systems expects third quarter revenues to be in the range of $9 to $10 million, down from earlier estimates of $22.5 to $23.5 million. This new estimate represents an increase of 93 percent over the $4.4 million reported in the same quarter of 2000.
Additionally, Avici is implementing cost-cutting measures and will reduce its workforce by 14 percent, or approximately 55 employees. In conjunction with its third quarter closing for the three months ending September 30, 2001, the company will take one time charges of between $15 and $18 million. Included in the charges are estimated provisions for excess inventory and related commitments of approximately $14 million, asset utilization of $1.5 million and severance and facility related costs of $1 million.
Pro-forma net loss per share, excluding non-cash stock based compensation and the estimated one time charges, for the three months ending September 30, 2001, is expected to be in the range of $0.40 to $0.42 per share compared to a current First Call consensus estimate of $0.23 loss per share. Net loss per share including non-cash stock based compensation and the one time charges is expected to range from $0.77 to $0.84. Pro-forma net loss per share and net loss per share for the three months ending September 30, 2000, were $0.33 and $0.70, respectively.
"Given the current slowdown in carrier spending, we are decreasing our operating expenses while at the same time increasing our focus on key accounts and products," said Steve Kaufman, president and CEO. "These measures will not affect our ability to meet current customer commitments for product installations or trials. Our cash position is solid, and we continue to focus on achieving profitable growth."
Conference Call Information
Avici Systems will have a conference call and Web cast today, September
10, 2001, beginning at 4:30 p.m. eastern time.
To participate via telephone, the U.S. dial-in number is (877) 260-8896, and the international dial-in number is (612) 338-1652. Please call 10 minutes prior to the scheduled conference call time. For live Webcasting, go to the Avici Web site at www.avici.com and access the investor relations section. Click on either the live Webcast link or the microphone icon to listen.
The conference call will be archived on the Avici Web site for approximately 48 hours for those who were unable to hear it live. A replay of the call will also be accessible by telephone after 12:00 p.m. and will be available for approximately 48 hours afterward. To replay the call, dial (800) 475-6701 in the United States and (320) 365-3844 internationally using the access code 602746.
About Avici Systems
Avici Systems Inc., headquartered in North Billerica, Mass., is a developer
of next-generation Internet routers that offer superior scalability,
reliability and port density enabling just-in-time bandwidth provisioning,
and the quality of service needed for carriers and ISPs to support
mission-critical applications.
Visit Avici's World Wide Website at http://www.avici.com.
Avici and TSR are registered trademarks of Avici Systems Inc.
This release contains information about Avici's future expectations, plans, and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. When used in this press release, the word "will", "expected" and other similar expressions are intended to identify such forward looking statements.
Such risks and uncertainties include, but are not limited to, market acceptance of Avici products, services and enhancements, customer purchasing patterns and commitments, development of the market place, product development and enhancement, intensity of competition of other vendors, technological changes and other risks set forth in Avici's filings with the Securities and Exchange Commission.
| For more information contact: |
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| Inna Vyadro Director of Investor Relations Avici Systems 978-964-2000 ivyadro@avici.com |
Cathy Caldeira/Dylan Locsin LNS Communications 617-577-9777 ccaldeira@LNScom.com dlocsin@LNScom.com |