Avici Systems Reports Fourth Quarter and Full Year 2004 Results
North Billerica, MA, January 27, 2005 — Avici Systems Inc. (NASDAQ: AVCI), today reported results for its fourth quarter and year ended December 31, 2004.
Gross revenue for the fourth quarter and year ended December 31, 2004 was $3.8 million and $26.6 million, respectively, compared to $11.5 million and $39.4 million, respectively, for the three and twelve month periods ended December 31, 2003. Revenue, net of common stock warrant discount, for the three and twelve month periods ended December 31, 2004 was $3.3 million and $24.5 million, respectively, compared to $11.5 million and $37.0 million in the comparable 2003 three and twelve month periods.
GAAP net loss for the fourth quarter ended December 31, 2004 was $9.7 million, or $0.76 per share, compared to a GAAP net loss of $3.9 million, or $0.32 per share, in the prior year's fourth quarter. GAAP net loss for the 2004 and 2003 fourth quarter periods includes $0.5 million and $0.1 million, respectively, for non-cash equity based charges, consisting of common stock warrant discount in the 2004 period and certain stock based compensation in the 2003 period. The charge in the 2003 fourth quarter was offset by other income of $3.0 million related to the expiration of certain customer credits and $0.5 million from the utilization of inventory previously written off.
GAAP net loss for the year ended December 31, 2004 was $35.4 million, or $2.81 per share, compared to a GAAP net loss of $37.0 million, or $3.02 per share, for the year ended December 31, 2003. GAAP net loss for the twelve months ended December 31, 2004 and 2003 includes $2.4 million and $3.5 million, respectively, for common stock warrant discount and certain stock based compensation, offset by $0.8 million and $1.9 million, respectively, of inventory credits, and in 2003, other income of $3.0 million related to the expiration of certain customer credits.
Although GAAP net loss for the three and twelve months ended December 31, 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 $3.4 million and $15.2 million lower for the three and twelve months ended December 31, 2004, respectively, as compared to the corresponding periods in the prior year. The three and twelve month year over year improvement in operating expenses results primarily from lower depreciation expense approximating $3.3 million and $12.7 million, respectively.
Non-GAAP net loss (GAAP net loss excluding charges for common stock warrant discount, certain stock based compensation, inventory credits and expiration of customer credits) and net loss per share for the three months ended December 31, 2004 and 2003 were $9.2 million, or $0.72 per share, and $7.3 million, or $0.60 per share, respectively. Non-GAAP net loss and net loss per share for the twelve months ended December 31, 2004 was $33.8 million, or $2.68 per share, compared to $38.4 million, or $3.14 per share for the prior year twelve month period ended December 31, 2003.
Cash, marketable securities and long-term investments totaled $69.0 million at December 31, 2004.
"As we enter 2005, Avici remains the leader in proven scalability and reliability. We are building on those technological advantages and the strength of our channel relationships to expand our customer base," said Bill Leighton, CEO of Avici Systems.
Avici will discuss these quarterly results in an investor conference call today at 8:30 AM eastern standard time. The conference telephone number is 888-428-4478. A replay of the conference call will be available after 1 PM. Replay information will be available at 800-475-6701, access code 766797. 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 |