Redback Networks Inc. (NASDAQ:RBAK), a leading provider of
broadband networking systems, today announced its third quarter
results for the period ended September 30, 2005. Net revenue for
the third quarter of 2005 was $36.4 million, an increase of five
percent from the second quarter of 2005. Net revenue was up $15.4
million, or 73 percent, over the third quarter of 2004. "In the
quarter, we have seen the rapid adoption of the new technology we
announced just one quarter earlier," said Kevin DeNuccio, president
and chief executive officer, Redback Networks. "The continued
selection of our SmartEdge(R) platform as the intelligent IP
platform for next generation services, such as IPTV and Video on
Demand by the world's leading carriers gives me a great deal of
confidence we have established a strong basis for continued growth
going forward. Overall, I am pleased with the revenue increase and
outlook as well as the strategic progress we made in the quarter."
GAAP net loss for the third quarter of 2005 was $8.4 million or
$(0.15) per share attributable to common stockholders compared to a
GAAP net loss of $12.5 million or $ (0.24) per share in the third
quarter of 2004. Non-GAAP net loss for the third quarter of 2005
was $4.2 million or $ (0.08) per share, compared to a non-GAAP net
loss of $10.3 million or $ (0.20) per share for the third quarter
of 2004. Excluded from the non-GAAP results for the third quarter
of 2005 were charges relating to amortization of intangible assets,
amortization of stock-based compensation, sale of inventory as
scrap, amortization of the fair value of warrants issued in
connection with a lease agreement, partial recovery on investment
that had previously been written down, accretion of a dividend
payable to the preferred stockholders and loss from early
retirement of software assets. See the attached table for a
reconciliation of our non-GAAP results to GAAP results. Redback
Networks will discuss these quarterly results in an investor
conference call today at 2:45 p.m. Pacific Time. The conference
telephone number is 1-847-619-6819. A live web cast is also
available from the investor relations portion of the Redback's web
site, www.redback.com/investors. A telephone replay of the
conference call will be available later in the day. Replay
information will be available at 1-630-652-3018, access code:
12850085. Information on these calls and web cast can also be found
on the company's web site. About Redback Networks Redback Networks
Inc., a leading provider of next-generation IP broadband networking
equipment, enables carriers and service providers to build Smart
Broadband Networks that can deliver simplified, personalized and
portable subscriber services to consumers and businesses. The
company's carrier-class, consumer-scale SmartEdge Router and
Service Gateway platforms combine subscriber management, IP edge
routing and Ethernet aggregation functions. In conjunction with the
NetOp(TM) Element and Policy Manager platforms they provide a
powerful, flexible infrastructure for managing both residential and
business users and deploying a variety of value-added services.
Founded in 1996 and headquartered in San Jose, Calif., with sales
and technical support centers located worldwide, Redback Networks
maintains a growing and global customer base of more than 500
carriers and service providers, including major local exchange
carriers (LECs), inter-exchange carriers (IXCs), PTTs and service
providers. For more information, visit Redback Networks at
www.redback.com. REDBACK and SmartEdge are trademarks registered at
the U.S. Patent and Trademark Office and in other countries. NetOp
is a trademark of Redback Networks Inc. Note Regarding Forward
Looking Statements The statements contained in this press release
that are not purely historical are forward-looking statements that
involve a number of risks and uncertainties, the outcome of which
could materially and/or adversely affect Redback's actual future
results. All forward-looking statements included in this document
are based upon information available as of the date hereof, and
Redback assumes no obligation to update these statements. These
risks and other risks relating to Redback's business are set forth
in the documents filed by Redback with the Securities and Exchange
Commission (SEC), specifically the most recent report on Form 10-K,
Form 10-Q and Form 8-K, and amendments thereto, and the other
reports filed from time to time with the SEC. Non-GAAP Disclosure
To supplement our consolidated financial statements presented in
accordance with GAAP, we use non-GAAP financial results, which are
adjusted from results based on GAAP to exclude certain items. These
non-GAAP results are provided to enhance the user's overall
understanding of our current financial performance and our
prospects in the future. Specifically, we believe the non-GAAP
results provide useful information to both management and investors
by excluding certain items that we believe are not indicative of
our core operating results. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with United States
GAAP. -0- *T Redback Networks Inc. Condensed Consolidated Balance
Sheets (In thousands) (unaudited) Successor ---------------------
Sept. 30, Dec. 31, 2005 2004 ----------- --------- Assets Assets:
Cash and cash equivalents $42,516 $42,558 Accounts receivable, net
18,582 21,892 Inventories 11,867 7,420 Property and equipment, net
15,146 16,583 Goodwill 144,610 145,083 Intangibles, net 58,324
66,285 Other assets 8,593 7,614 ----------- --------- Total assets
$299,638 $307,435 =========== ========= Liabilities, Mandatory
Redeemable Convertible Preferred Stock, and Stockholders' Equity
Liabilities: Borrowings and capital lease obligations $2,399 $-
Accounts payable and accrued liabilities 39,325 36,633 Deferred
revenue 16,530 17,546 Long term liabilities 1,515 2,181 -----------
--------- Total liabilities 59,769 56,360 Mandatory redeemable
convertible preferred stock 47,743 47,282 Stockholders' equity
192,126 203,793 ----------- --------- Total liabilities, mandatory
redeemable convertible preferred stock and stockholders' equity
$299,638 $307,435 =========== ========= Redback Networks Inc.
Condensed Consolidated Statements of Operations (In thousands,
except per share amounts) (unaudited) Successor Successor
Predecessor -------------------- ------------------- ----------
Three Three Nine Jan. 3 Jan. 1 Months Months Months Through Through
Ended Ended Ended Sept. 30, Jan. 2, Sept. 30, Sept. 30, Sept. 30,
2004 2004 2005 2004 2005 --------- ---------- --------- ---------
---------- Net revenue $36,431 $21,006 $105,277 $83,487 $- Cost of
revenue, excluding amortization 15,618 9,367 42,088 35,103 -
Amortization 2,726 2,728 8,170 8,184 - --------- ----------
--------- --------- ---------- Total cost of revenue 18,344 12,095
50,258 43,287 - --------- ---------- --------- --------- ----------
Gross profit 18,087 8,911 55,019 40,200 - --------- ----------
--------- --------- ---------- Operating expenses: Research and
development 14,223 11,897 43,597 35,895 - Selling, general and
adminis- trative 10,448 9,978 30,438 30,507 - Reorganization items
- - - 2,787 - Stock-based compensation 984 4,880 3,025 15,368 -
--------- ---------- --------- --------- ---------- Total operating
expenses 25,655 26,755 77,060 84,557 - --------- ----------
--------- --------- ---------- Loss from operations (7,568)
(17,844) (22,041) (44,357) - Other income (expense), net (677)
5,511 (184) 5,324 - Net gain on discharge of debt - - - - 71,164
Fresh start adjustments - - - - (218,691) Induced conversion charge
- - - - (335,809) --------- ---------- --------- ---------
---------- Loss before reorganization items (8,245) (12,333)
(22,225) (39,033) (483,336) Reorganization items - - - - (1,539)
--------- ---------- --------- --------- ---------- Net loss before
deemed dividend and accretion on preferred stock (8,245) (12,333)
(22,225) (39,033) (484,875) Deemed dividend and accretion on
preferred stock (155) (143) (461) (17,114) - --------- ----------
--------- --------- ---------- Net loss attributable to common
stockholders $(8,400) $(12,476) $(22,686) $(56,147) $(484,875)
========= ========== ========= ========= ========== Net loss
attributable to common stockholders per share - basic and diluted
$(0.15) $(0.24) $(0.42) $(1.08) $(2.65) ========= ==========
========= ========= ========== Shares used in computing net loss
attributable to common stockholders per share (a) 54,649 52,538
54,081 52,032 183,009 ========= ========== ========= =========
========== (a) Reflects a change in the capitalization of the
Company as a result of the plan of reorganization effective as of
January 2, 2004. Redback Networks Inc. Non-GAAP Condensed
Consolidated Statements of Operations (In thousands, except per
share amounts) (unaudited) Successor Successor Three Months Ended
Three Months Ended September 30, 2005 September 30, 2004
-------------------------- ---------------------------- Non-GAAP
Recon- GAAP Non-GAAP Recon- GAAP (a) ciling (b) (a) ciling (b)
Items Items -------- -------- -------- --------- -------- ---------
Net revenue $36,431 $- $36,431 $21,006 $- $21,006 Cost of revenue,
excluding amortization 15,618 - 15,618 9,367 9,367 Amortization -
2,654(c) 2,654 - 2,654(c) 2,654 - 72(e) 72 - 74(e) 74 --------
-------- -------- --------- -------- --------- Total cost of
revenue 15,618 2,726 18,344 9,367 2,728 12,095 -------- --------
-------- --------- -------- --------- Gross profit (loss) 20,813
(2,726) 18,087 11,639 (2,728) 8,911 -------- -------- --------
--------- -------- --------- Operating expenses: Research and
development 13,896 327(e) 14,223 11,599 298(e) 11,897 Selling,
general and adminis- trative 10,368 80(e) 10,448 9,870 108(e) 9,978
Stock-based compen- sation - 984(d) 984 - 4,880(d) 4,880 --------
-------- -------- --------- -------- --------- Total operating
expenses 24,264 1,391 25,655 21,469 5,286 26,755 -------- --------
-------- --------- -------- --------- Loss from operations (3,451)
(4,117) (7,568) (9,830) (8,014) (17,844) Other income (expense),
net (720) 43(f) (677) (517) 6,028(f) 5,511 -------- --------
-------- --------- -------- --------- Net loss before deemed
dividend and accretion on preferred stock (4,171) (4,074) (8,245)
(10,347) (1,986) (12,333) Deemed dividend and accretion on
preferred stock - (155)(g) (155) - (143)(g) (143) -------- --------
-------- --------- -------- --------- Net loss attributable to
common stockholders $(4,171) $(4,229) $(8,400) $(10,347) $(2,129)
$(12,476) ======== ======== ======== ========= ======== =========
Net loss attributable to common stockholders per share - basic and
diluted $(0.08) $(0.15) $(0.20) $(0.24) ======== ======== =========
========= Shares used in computing net loss attributable to common
stockholders per share (h) 54,649 54,649 52,538 52,538 ========
======== ========= ========= (a) Non-GAAP amounts exclude certain
reconciling items including amortization of intangible assets,
amortization of stock-based compensation, amortization of the fair
value of warrants issued in connection with a lease agreement,
partial recovery on investments that had been previously written
down and accretion of a dividend payable to the preferred
stockholders. (b) Reflects operating results based upon accounting
principles generally accepted in the United States (GAAP). (c)
Amount represents amortization of intangible assets. (d) Amount
represents amortization of stock-based compensation. (e) Amount
represents amortization of the fair value of warrants issued in
connection with a lease agreement. (f) Amount represents partial
recovery on investment that had previously been written down. (g)
Amount represents accretion of a dividend payable to the preferred
stockholders. (h) Reflects a change in the capitalization of the
Company as a result of the plan of reorganization effective January
2, 2004. To supplement our condensed consolidated financial
statements presented in accordance with GAAP, we use non-GAAP
financial results, which are adjusted from results based on GAAP to
exclude certain items. These non-GAAP results are provided to
enhance the user's overall understanding of our current financial
performance and to help assess our prospects in the future.
Specifically, we believe the non-GAAP results provide useful
information to both management and investors by excluding certain
items that we believe are not indicative of our core operating
results. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for results
prepared in accordance with United States GAAP. Redback Networks
Inc. Non-GAAP Condensed Consolidated Statements of Operations (In
thousands, except per share amounts) (unaudited) Successor
Successor -----------------------------
----------------------------- Nine Months Ended January 3 Through
September 30, 2005 September 30, 2004 -----------------------------
----------------------------- Non-GAAP Recon- GAAP Non-GAAP Recon-
GAAP (a) ciling (b) (a) ciling (b) Items Items --------- ---------
--------- --------- --------- --------- Net revenue $105,277 $-
$105,277 $83,487 $- $83,487 Cost of revenue, excluding amort-
ization 42,088 - 42,088 35,266 7,962(c) 43,228 Amort- ization -
7,962(c) 7,962 - (163)(d) (163) - 208(f) 208 - 222(f) 222 ---------
--------- --------- --------- --------- --------- Total cost of
revenue 42,088 8,170 50,258 35,266 8,021 43,287 --------- ---------
--------- --------- --------- --------- Gross profit (loss) 63,189
(8,170) 55,019 48,221 (8,021) 40,200 --------- --------- ---------
--------- --------- --------- Operating expenses: Research and
develop- ment 42,583 1,014(f,i) 43,597 35,001 894(f) 35,895
Selling, general and adminis- trative 30,181 257(f) 30,438 30,183
324(f) 30,507 Reorgan- ization items - - - 2,787 - 2,787 Stock-
based compen- sation - 3,025(e) 3,025 - 15,368(e) 15,368 ---------
--------- --------- --------- --------- --------- Total opera- ting
expenses 72,764 4,296 77,060 67,971 16,586 84,557 ---------
--------- --------- --------- --------- --------- Loss from
operations (9,575) (12,466) (22,041) (19,750) (24,607) (44,357)
Other income (expense), net (366) 182(h) (184) (704) 6,028(h) 5,324
--------- --------- --------- --------- --------- --------- Net
loss before deemed dividend and accretion on preferred stock
(9,941) (12,284) (22,225) (20,454) (18,579) (39,033) Deemed
dividend and accretion on preferred stock - (461)(g) (461) -
(17,114)(g) (17,114) --------- --------- --------- ---------
--------- --------- Net loss attri- butable to common stock-
holders $(9,941) $(12,745) $(22,686) $(20,454) $(35,693) $(56,147)
========= ========= ========= ========= ========= ========= Net
loss attri- butable to common stock- holders per share - basic and
diluted $(0.18) $(0.42) $(0.39) $(1.08) ========= =========
========= ========= Shares used in computing net loss attri-
butable to common stock- holders per share (j) 54,081 54,081 52,032
52,032 ========= ========= ========= ========= (a) Non-GAAP amounts
exclude certain reconciling items including amortization of
intangible assets, sale of inventory as scrap, amortization of
stock-based compensation, amortization of the fair value of
warrants issued in connection with a lease agreement, deemed
dividend to the preferred stockholders due to a beneficial
conversion feature and accretion of a dividend payable to the
preferred stockholders, partial recovery on certain investments
that had been previously written down, and loss from early
retirement of software license assets. (b) Reflects operating
results based upon accounting principles generally accepted in the
United States (GAAP). (c) Amount represents amortization of
intangible assets. (d) Amount represents proceeds from sale of
inventory as scrap. (e) Amount represents amortization of
stock-based compensation. (f) Amount represents amortization of the
fair value of warrants issued in connection with a lease agreement.
(g) Amount represents accretion of a dividend payable to the
preferred stockholders including beneficial conversion feature of
$16.7M in the period from January 3 through September 30, 2004. (h)
Amount represents partial recovery on certain investments that had
been previously written down. (i) Amount represents loss from early
retirement of software license assets. (j) Reflects a change in the
capitalization of the Company as a result of the plan of
reorganization effective January 2, 2004. To supplement our
condensed consolidated financial statements presented in accordance
with GAAP, we use non-GAAP financial results, which are adjusted
from results based on GAAP to exclude certain items. These non-GAAP
results are provided to enhance the user's overall understanding of
our current financial performance and to help assess our prospects
in the future. Specifically, we believe the non-GAAP results
provide useful information to both management and investors by
excluding certain items that we believe are not indicative of our
core operating results. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with United States
GAAP. Redback Networks Inc. Condensed Consolidated Statements of
Cash Flows (In thousands) (Unaudited) Successor Successor
Predecessor ----------- ---------- ----------- Nine months Jan. 3
Jan. 1 ended Through Through Sept. 30, Sept. 30, Jan. 2, 2005 2004
2004 ----------- ---------- ----------- CASH FLOWS FROM OPERATING
ACTIVITIES Net loss before deemed dividend and accretion on
preferred stock $(22,225) $(39,033) $(484,875) Adjustments to
reconcile net loss to net cash used in operating activities:
Depreciation and amortization 20,029 16,920 - Stock-based
compensation 3,025 15,368 - Gain on sale of equity investment -
(6,028) - Net gain on discharge of debt, fresh-start accounting
adjustments, and induced conversion charges - 400 483,336 Changes
in assets and liabilities: Accounts receivable, net 3,310 3,181 -
Inventories (7,433) (5,612) - Other assets (2,112) 1,406 - Accounts
payable and accrued liabilities 4,233 (4,088) 1,539 Deferred
revenue (1,016) 3,162 - Other long-term liabilities (267) 2,116 -
----------- ---------- ----------- Net cash used in operating
activities (2,456) (12,208) - ----------- ---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and
equipment (7,080) (1,728) - Proceeds from sale of equity investment
- 6,028 - Change in restricted cash, net - 478 - -----------
---------- ----------- Net cash (used in) provided by investing
activities (7,080) 4,778 - ----------- ---------- ----------- CASH
FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of stock and
exercise of warrants 7,663 32,419 - Principal payments on capital
lease obligations and borrowings (2,169) (335) - Proceeds from bank
borrowings, net 4,000 - - ----------- ---------- ----------- Net
cash provided by financing activities 9,494 32,084 - -----------
---------- ----------- Net increase (decrease) in cash and cash
equivalents (42) 24,654 - Cash and cash equivalents at beginning of
period 42,558 20,519 20,519 ----------- ---------- ----------- Cash
and Cash equivalents at end of period $42,516 $45,173 $20,519
=========== ========== =========== *T
Redback (NASDAQ:RBAK)
Historical Stock Chart
From Sep 2024 to Oct 2024
Redback (NASDAQ:RBAK)
Historical Stock Chart
From Oct 2023 to Oct 2024