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SANTA BARBARA, Calif.--(BUSINESS WIRE)--Feb. 16, 2005-- Occam Networks Inc. (OTCBB: OCCM), a supplier of innovative Ethernet and IP-based loop carrier equipment to telecommunications service providers worldwide, today reported results for the fourth quarter of 2004, which ended Dec. 31, 2004. The company reported revenue for the quarter of $6.5 million, setting a new record. Fourth quarter 2004 revenues represented an increase of 46 percent over the third quarter of 2004, the company's previous highest revenue quarter. During the quarter gross margins continued to improve, with the quarterly operating loss reduced from $3.0 million ($3.2 million on a GAAP basis) in the third quarter to $2.0 million ($2.2 million on a GAAP basis) this quarter. Non-GAAP net loss excludes non-cash expenses associated with amortization of deferred compensation. Annual revenue for 2004 was $17.3 million, more than doubling annual revenue of $7.9 million for 2003. Results for the fourth quarter of 2004 are unaudited and will be verified when the company files its 10-K report and holds it earnings release call in March. There is still one specific calculation on warrant valuation that is being reviewed, but the results of the valuation are not expected to have a material effect on our operating results as reported today. The company will announce the date and time of the earnings call at a later date. "Occam experienced substantial revenue growth in 2004, with Q4 being our best revenue quarter ever," said Bob Howard-Anderson, president and CEO of Occam Networks. "In 2004, we significantly increased revenue, added 31 new customers for a total of 75 and increased our gross margins. We are very pleased with the company's progress. "In January we announced additional funding from our existing investors of $5.5M which is not reflected in the Dec. 31, 2004 balance sheet," added Howard-Anderson. In addition to adding 31 new customers in 2004, Occam shipped the industry's first 48-port combination ADSL2Plus and POTS blade, as well as a 48-port ADSL2Plus blade for the BLC 6000 System; elected three new board members, Kenneth R. Cole, Thomas Pardun, and Robert Bylin; added the BLC 6000 to the RUS list of materials; expanded its reseller network; and renewed the company's ISO 9001:2000 Certification.
-0- *T SUMMARY FINANCIAL INFORMATION: OCCAM NETWORKS INC. NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands $) (Unaudited)
Three Months Ended ------------------------------- Dec 31 Dec 31 2004 2003 ---------------- --------------
Net revenue $6,481 $3,775 Cost of revenue 4,615 3,621 ---------------- --------------
Gross Profit (loss) 1,866 154
Operating Expenses: Research and product development 1,403 2,028 Sales and marketing 1,872 1,319 General and administrative 628 543 ---------------- --------------
Total operating expenses 3,903 3,890 ---------------- --------------
Loss from operations (2,037) (3,736)
Interest expense, net (55) (43) ---------------- --------------
Non-GAAP loss before income taxes (2,092) (3,779)
Income Tax (Benefit) Provision - (16) ---------------- --------------
Non-GAAP net loss $(2,092) $(3,763) ================ ==============
Reconciliation of non-GAAP net loss to GAAP net loss attributable to common stockholders: Non-GAAP net loss $(2,092) (3,763) Non-GAAP exclusions: Deferred stock-based compensation (177) (281) Beneficial conversion feature on series A-2 preferred stock and warrants (90) (3,038) ---------------- --------------
GAAP net loss attributable to common stockholders: $(2,359) $(7,082) ================ ==============
OCCAM NETWORKS INC. GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands $) (Unaudited)
Three Months Ended ------------------------------- Dec 31 Dec 31 2004 2003 ---------------- --------------
Net Revenue $6,481 $3,775 Cost of revenue 4,615 3,621 ---------------- --------------
Gross Profit (loss) 1,866 154
Operating Expenses (1): Research and product development 1,555 2,236 Sales and marketing 1,894 1,367 General and administrative 631 568 ---------------- --------------
Total operating expenses 4,080 4,171 ---------------- --------------
Loss from operations (2,214) (4,017)
Interest expense, net (55) (43) ---------------- --------------
Loss before beneficial conversion feature and interest attributable to common stock potentially subject to rescission (2,269) (4,060)
Income Tax (Benefit) Provision - (16) ---------------- --------------
Net loss $(2,269) $(4,044) ================ ==============
Beneficial conversion feature on series A-2 preferred stock and warrants (90) (3,038) ---------------- --------------
Net loss attributable to common stockholders $(2,359) $(7,082) ================ ==============
(1) Amortization of deferred stock-based compensation included in: Research and product development $152 $208 Sales and marketing 22 48 General and administrative 3 25 ---------------- -------------- $177 $281 ================ ==============
OCCAM NETWORKS INC. Consolidated Balance Sheet (In thousands $) (Unaudited)
------------------------------- Dec 31 Dec 31 2004 2003 ---------------- -------------- Assets
Cash and cash equivalents $4,432 $14,586 Restricted cash 2,101 935 Accounts receivable 5,217 2,342 Inventories 6,611 2,254 Prepaid and other current assets 873 1,077 ---------------- -------------- Total current assets 19,234 21,194
Property and equipment, net 1,692 1,937 Other assets 183 273 ---------------- --------------
Total assets $21,109 $23,404 ================ ==============
Liabilities, Preferred Stock and Stockholders' Equity
Accounts payable $6,301 $3,001 Accrued expenses 3,330 2,377 Capital lease obligations and notes payable, current 956 708 ---------------- -------------- Total current liabilities 10,587 6,086
Capital lease obligations and notes payable, non-current 3,072 998 ---------------- -------------- Total liabilities 13,659 7,084
This press release contains forward-looking statements concerning our revenues and operating results for the fourth quarter of 2004 and for fiscal year 2004. The estimates disclosed in this press release are preliminary and have not been reviewed by Occam's outside accountants. These estimates could change materially as a result of outside accountant review. Occam's business, operating results, and financial condition are subject to numerous risks and uncertainties. These risks include, among others, the risk that our revenues will not increase as anticipated if our BLC 6000 product does not achieve market acceptance. For example, BLC 6000 products could fail to achieve market acceptance based on competitive factors, an unwillingness of telecommunication companies to make substantial capital expenditures, or a failure of these products to perform to industry standards, which may change based on technological developments. Additional risks associated with our business include general market conditions affecting the decisions of communications service providers to purchase Occam's equipment, changes in service providers' business models, the rate our customers deploy their networks, our customers' ability to secure financing, the timing of order and shipments of products, mix of products sold, changes in the prices of components, Occam's ability to maintain production volumes and secure key components, and Occam's ability to develop new products. Please refer to Occam's most recent quarterly report on Form 10-Q, annual report on Form 10-K and other filings Occam makes with the SEC for additional factors that could cause actual results to differ materially from those contained in any forward-looking statements provided today.
Use of Non-GAAP Financial Measures
To supplement its consolidated financial statements presented in accordance with GAAP, Occam Networks uses non-GAAP measures of pro forma net loss, which are adjusted from GAAP results, principally to reflect non-cash charges for amortization of deferred compensation. These non-GAAP adjustments are provided to enhance investors' overall understanding of Occam's current financial performance and prospects. These measures are not in accordance with generally accepted accounting principles in the United States. Occam believes the presentation of non-GAAP results provides useful information to management and investors by excluding certain expenses that it believes are not indicative of core operating results. These non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. In addition, because the company has historically reported non-GAAP results, it believes the inclusion of non-GAAP numbers provides consistency for financial reporting. The presentation of this additional non-GAAP information should not be considered in isolation or as a substitute for the results prepared in accordance with generally accepted accounting principles in the United States.
About Occam Networks Inc.
Occam Networks Inc. develops and markets innovative Broadband Loop Carrier networking equipment that enables telephone companies to deliver voice, data and video services. Based on Ethernet and Internet Protocol (IP) technologies, Occam's equipment allows telecommunications service providers to profitably deliver traditional phone services, as well as advanced Voice over IP, residential and business broadband, and digital television services through a single, all-packet access network. Occam is headquartered in Santa Barbara, Calif. Additional information can be found at www.occamnetworks.com.
KEYWORD: NORTH AMERICA CALIFORNIA UNITED STATES INDUSTRY KEYWORD: TECHNOLOGY NETWORKS TELECOMMUNICATIONS EARNINGS SOURCE: Occam Networks Inc.
CONTACT INFORMATION: Occam Networks Inc., Santa Barbara Howard Bailey, 805-692-2908 hbailey@occamnetworks.com or Connect Public Relations Holly Hagerman, 801-373-7888 hollyh@connectpr.com
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