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Sonus Networks Reports 2010 First Quarter Results
May 04, 2010 (04:05 PM EDT)


WESTFORD, Mass., May 4 /PRNewswire-FirstCall/ -- Sonus Networks, Inc. (Nasdaq: SONS), a market leader in next generation IP-based network solutions, today announced results for the quarter ended March 31, 2010.

Revenue for the first quarter of fiscal 2010 was $62.4 million, compared to $68.7 million in the fourth quarter of fiscal 2009 and $41.0 million for the first quarter of fiscal 2009.  The Company's net loss on a GAAP basis for the first quarter of fiscal 2010 was $0.1 million, or $0.00 per share, compared to net income of $10.3 million, or $0.04 per diluted share, for the fourth quarter of fiscal 2009, and a net loss of $16.2 million, or $0.06 per share, for the first quarter of fiscal 2009.

"We are pleased with our strong first quarter results, which reflect the successful execution of our strategic plan," said Richard Nottenburg, President and Chief Executive Officer of Sonus Networks.  "During the quarter, we continued to extend our leadership position as we added new customers, penetrated new markets and made significant enhancements to our core products and service offerings.  We look forward to launching new products on our next generation platform in the near future."

Conference Call Details:

Sonus Networks will host a conference call for analysts and investors to discuss its first quarter 2010 results as well as certain forward-looking information today at 4:45 p.m. ET.

To listen live via telephone:

Dial-in number: 800-908-9173

International Callers: +1 212-231-2900

To listen via internet:

Sonus Networks will host a live webcast of the conference call.  To access the webcast, visit www.sonusnet.com, About Us, Investor Relations.

About Sonus Networks

Sonus Networks, Inc. is a leader in IP networking with proven expertise in delivering secure, reliable and scalable next generation infrastructure and subscriber solutions.  With customers in over 50 countries across the globe and over a decade of experience in transforming networks to IP, Sonus has enabled service providers and enterprises to capture and retain users and generate significant ROI.  Sonus products include media and signaling gateways, policy/routing servers, session border controllers and subscriber feature servers.  Sonus products are supported by a global services team with experience in design, deployment and maintenance of some of the world's largest and most complex IP networks.  For more information visit www.sonusnet.com.

This release may contain forward-looking statements regarding future events that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results.  Readers are referred to Item 1A "Risk Factors" of Sonus' Annual Report on Form 10-K for the year ended December 31, 2009 and Form 10-Q for the quarter ended March 31, 2010, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.  Any forward-looking statements represent Sonus' views only as of today and should not be relied upon as representing Sonus' views as of any subsequent date.  While Sonus may elect to update forward-looking statements at some point, Sonus specifically disclaims any obligation to do so, except as required by law.

Sonus is a registered trademark of Sonus Networks, Inc.  All other company and product names may be trademarks of the respective companies with which they are associated.

SONUS NETWORKS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)























Three months ended





March 31,


December 31,


March 31,





2010


2009


2009

Revenue:








Product

$ 36,278


$        47,009


$  19,403


Service

26,130


21,703


21,609



Total revenue

62,408


68,712


41,012










Cost of revenue:







Product

12,301


11,852


6,134


Service

11,929


11,481


11,663



Total cost of revenue

24,230


23,333


17,797










Gross profit

38,178


45,379


23,215










Gross profit %







Product

66.1%


74.8%


68.4%


Service

54.3%


47.1%


46.0%



Total gross profit %

61.2%


66.0%


56.6%










Operating expenses:







Research and development

14,940


13,869


16,353


Sales and marketing

13,594


12,911


12,147


General and administrative

10,144


10,958


10,495


Restructuring

-


-


1,984



Total operating expenses

38,678


37,738


40,979










Income (loss) from operations

(500)


7,641


(17,764)

Interest expense

(13)


(89)


(79)

Interest income

515


592


1,649

Other income (expense), net

10


47


(7)










Income (loss) before income taxes

12


8,191


(16,201)

Income tax benefit (provision)

(146)


2,118


(26)










Net income (loss)

$     (134)


$        10,309


$ (16,227)










Earnings (loss) per share:







Basic








Diluted

$         -


$            0.04


$     (0.06)





$         -


$            0.04


$     (0.06)

Shares used to compute earnings (loss) per share:







Basic


274,701


274,359


273,095


Diluted

274,701


275,152


273,095



SONUS NETWORKS, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)












March 31,


December 31,





2010


2009

Assets




Current assets:





Cash and cash equivalents

$    64,861


$      125,323


Marketable securities

281,799


239,223


Accounts receivable, net

32,385


47,998


Inventory, net

20,119


21,925


Deferred income taxes

640


562


Other current assets

20,426


17,508



Total current assets

420,230


452,539








Property and equipment, net

13,518


14,646

Intangible assets, net

2,203


341

Goodwill


5,059


5,053

Investments

66,299


49,598

Deferred income taxes

730


711

Other assets

17,035


17,849





$  525,074


$      540,737








Liabilities and stockholders' equity




Current liabilities:





Accounts payable

$      8,506


$          5,337


Accrued expenses

14,265


19,292


Current portion of deferred revenue

59,149


74,748


Current portion of long-term liabilities

525


753



Total current liabilities

82,445


100,130








Deferred revenue

24,451


25,242

Long-term liabilities

1,145


1,127




Total liabilities

108,041


126,499








Commitments and contingencies











Stockholders equity:





Common stock

278


277


Additional paid-in capital

1,289,415


1,286,326


Accumulated deficit

(878,944)


(878,810)


Accumulated other comprehensive income

6,551


6,712


Treasury stock

(267)


(267)




Total stockholders' equity

417,033


414,238





$  525,074


$      540,737



SONUS NETWORKS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)














Three months ended






March 31,


March 31,






2010


2009

Cash flows from operating activities:





Net loss

$       (134)


$  (16,227)


Adjustments to reconcile net loss to cash flows provided by operating activities:






Depreciation and amortization of property and equipment

2,458


2,502



Amortization of intangible assets

138


96



Stock-based compensation

2,486


3,040



Loss on disposal of property and equipment

57


2



Deferred income taxes

-


(38)



Changes in operating assets and liabilities:







Accounts receivable

15,477


24,885




Inventory

2,852


(2,615)




Other operating assets

(2,098)


(4,148)




Accounts payable

3,547


(3,348)




Accrued expenses

(5,039)


(8,951)




Deferred revenue

(16,445)


13,712





Net cash provided by operating activities

3,299


8,910









Cash flows from investing activities:





Purchases of property and equipment

(1,763)


(770)


Purchase of intangible assets

(2,000)


-


Purchases of marketable securities

(121,856)


(11,936)


Sale/maturities of  marketable securities

61,493


82,895


Increase in litigation escrow

-


(9,500)





Net cash provided by (used in) investing activities

(64,126)


60,689









Cash flows from financing activities:





Sale of common stock in connection with employee stock purchase plan

609


529


Proceeds from exercise of stock options

35


1


Payment of tax withholding obligations related to net share settlements of restricted stock awards

(180)


(122)


Principal payments of capital lease obligations

(55)


(64)





Net cash provided by financing activities

409


344

















Effect of exchange rate changes on cash and cash equivalents

(44)


(71)









Net increase (decrease) in cash and cash equivalents

(60,462)


69,872

Cash and cash equivalents, beginning of year

125,323


122,207

Cash and cash equivalents, end of period

$    64,861


$  192,079



SONUS NETWORKS, INC.

Supplemental Information

(In thousands)

(unaudited)


The following tables provide the details of stock-based compensation and amortization of intangible assets included in the Company's Condensed Consolidated Statements of Operations and the line items in which these amounts are reported.  Additional information regarding these items is available in the Investor Relations section of our website at http://www.sonusnet.com.  The information contained on our website or that can be accessed through our website should not be considered to be part of, or incorporated into, this press release.














Three months ended





March 31,


December 31,


March 31,





2010


2009


2009

Stock-based compensation







Cost of revenue - product

$        71


$               63


$      116


Cost of revenue - service

419


449


465



Cost of revenue

490


512


581











Research and development expense

606


706


767


Sales and marketing expense

729


812


1,044


General and administrative expense

661


891


648



Operating expense

1,996


2,409


2,459













Total stock-based compensation

$   2,486


$          2,921


$   3,040



















Amortization of intangible assets







Cost of revenue - product

$        38


$               40


$        96


Research and development

100


-


-




Total amortization of intangible assets

$      138


$               40


$        96



For more information, please contact:

Wayne Pastore

978-614-8291

wpastore@sonusnet.com

Fran Murphy

978-614-8148

fmurphy@sonusnet.com




SOURCE Sonus Networks, Inc.