Avici Systems Announces First Quarter 2006 Results
Reports near record quarterly gross revenue and first profit before special charges
N. Billerica, MA, April 20, 2006 — North Billerica, MA, April 20, 2006--- Avici Systems Inc. (NASDAQ: AVCI), today reported its first quarter results for the three months ended March 31, 2006.
Gross revenue for the first quarter ended March 31, 2006 was $21.4 million compared to $10.7 million for the comparable three-month period ended March 31, 2005 and $6.1 million in the preceding quarter ended December 31, 2005. Revenue, net of common stock warrant discount, for the March 2006 quarter was $20.9 million, compared to $10.2 million for the three months ended March 31, 2005 and $5.6 million in the December 2005 quarter.
GAAP net loss for the first quarter ended March 31, 2006 was $5.3 million, or $0.41 per share, compared to a GAAP net loss of $5.6 million, or $0.44 per share, in the prior year.s first quarter.
GAAP net loss for the three months ended March 31, 2006 includes $6.7 million of special charges associated with the company.s recent decision to restructure its business and re-align its cost structure, and other non-cash equity based charges of $0.8 million. Special charges include $5.3 million of costs associated with the company.s workforce reduction, the write-off of certain contract distribution rights deemed impaired at March 31, 2006 and certain other costs associated with the company.s decision to restructure its business and realign its cost structure and an additional charge of $1.4 million for certain inventory considered in excess of anticipated future requirements. Other non-cash equity based charges include $0.3 million recognized upon the prospective adoption of Financial Accounting Standards Board Opinion 123R, which now requires that that the fair values of stock options be expensed in the Company.s GAAP financial statements, and $0.5 million for common stock warrant discount. This compares to a charge of $0.5 million in the prior year.s first quarter ended March 31, 2005 for common stock warrant discount. GAAP net loss in each of the 2006 and 2005 three-month periods includes credits of $0.2 million for inventory utilization.
Excluding these items, non-GAAP net income and net income per share for the three months ended March 31, 2006 was $2.0 million, or $0.15 per share, compared to a non-GAAP net loss of $5.2 million, or $0.41 per share, in the prior year quarter ended March 31, 2005.
Cash, cash equivalents, short and long-term marketable securities and restricted cash totaled $48.3 million at March 31, 2006.
"Strong first quarter order volume coupled with the initial positive affects experienced from our business restructuring and cost structure re-alignment have resulted in Avici.s highest quarterly revenue since mid-2001 and produced our first ever positive bottom line result, before special charges," said Bill Leighton, Chief Executive Officer.
Avici will discuss these quarterly results as well as future business and financial expectations in an investor conference call today at 8:30 AM eastern daylight savings time. The conference telephone number is (877) 209-0397. A replay of the conference call will be available after 11:15 AM. Replay information will be available at (800) 475-6701 (USA) and (320) 365-3844 (International), access code: 825121. Replay of this call is also available on Avici.s Web site, www.avici.com, along with a copy of this release.
Avici is a trademark of Avici Systems Inc.
This release contains information about Avici's future expectations, plans, and prospects, including Avici.s expectations for annual gross revenues 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. Statements made with regard to interim results are not necessarily indicative of results that may be expected for future interim periods or for the full year. 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, the impact of restructuring and realignment, the amount and timing of the occurrence of related charges, risks associated with focusing on a core set of features and functionalities, market acceptance of Avici products, services and enhancements, dependence on our major customer, 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. Avici does not undertake any duty to update forward-looking statements.
| 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 |