Avici Systems Reports Third Quarter 2004 Results
North Billerica, MA, October 21, 2004 — Avici Systems Inc. (NASDAQ: AVCI), today reported results for its third quarter and nine months ended September 30, 2004.
Gross revenue for the third quarter and nine months ended September 30, 2004 was $3.7 million and $22.8 million, respectively, compared to $10.5 million and $27.9 million, respectively, for the three and nine month periods ended September 30, 2003. Revenue, net of common stock warrant discount, for the three and nine month periods ended September 30, 2004 was $3.2 million and $21.2 million, respectively, compared to $9.6 million and $25.4 million in the comparable 2003 three and nine month periods.
GAAP net loss for the third quarter ended September 30, 2004 was $10.4 million, or $0.82 per share, compared to a GAAP net loss of $9.1 million, or $0.75 per share, in the prior year's third quarter. GAAP net loss for the 2004 and 2003 third quarter periods includes $0.7 million and $1.0 million, respectively, for non-cash equity based charges, consisting of common stock warrant discount and certain stock based compensation. The charge in the 2003 third quarter was offset by a $0.6 million credit from the utilization of inventory previously written off.
GAAP net loss for the nine months ended September 30, 2004 was $25.7 million, or $2.04 per share, compared to a GAAP net loss of $33.1 million, or $2.70 per share, for the same period last year. GAAP net loss for the nine months ended September 30, 2004 and 2003 includes $1.9 million and $3.3 million, respectively, for common stock warrant discount and certain stock based compensation, offset by $0.7 million and $1.4 million, respectively, of inventory credits.
Although GAAP net loss for the three and nine months ended September 30, 2004 was adversely affected by lower gross margin dollars resulting from the decline in year over year revenue levels and customer mix, operating expenses on a GAAP basis were $4.2 million and $11.8 million lower for the three and nine months ended September 30, 2004, respectively, as compared to the corresponding periods in the prior year. The three and nine month year over year improvement in operating expenses results primarily from lower depreciation expense approximating $3.8 million and $9.4 million, respectively.
Non-GAAP net loss (GAAP net loss excluding charges for common stock warrant discount, certain stock based compensation and inventory credits) and net loss per share for the three months ended September 30, 2004 and 2003 were $9.8 million, or $0.77 per share, and $8.7 million, or $0.72 per share, respectively. Non-GAAP net loss and net loss per share for the nine months ended September 30, 2004 was $24.6 million, or $1.95 per share, compared to $31.2 million, or $2.54 per share for the prior year nine month period ended September 30, 2003.
Cash, marketable securities and long-term investments totaled $76.7 million at September 30, 2004.
"Despite the shortfall in third quarter revenue, we see good prospects for future growth and customer wins," said Steve Kaufman, President and CEO. "This results from a strengthening pipeline of channel business and new IP network build-outs."
Avici will discuss these quarterly results in an investor conference call today at 8:30 AM eastern daylight savings time. The conference telephone number is (888) 273-9887. A replay of the conference call will be available after 1 PM. Replay information will be available at (800) 475-6701, access code: 750230. Replay of this call is also available on Avici's Web site, www.avici.com, along with a copy of this release.
About Avici Systems
Avici Systems Inc., headquartered in North Billerica, Mass., is a leading provider of purpose-built carrier-class routing solutions for the Internet. Avici's family of routers is designed to meet carrier requirements for the highest scalability, reliability and network availability, while lowering the total cost of building and operating their networks. The company's routing systems provide new IP solutions to some of the world's leading service providers. For more information, please visit us at www.avici.com.
Avici is a trademark 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, reliance on distribution partners, risks associated with international expansion, 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 |
Paul Brauneis Chief Financial Officer Avici Systems 978-964-2000 pbrauneis@avici.com |