SOURCE: Carrier Access

September 14, 2005 17:23 ET

Carrier Access Reports First and Second Quarter 2005 Results

Company Completes Its Financial Filings

BOULDER, CO -- (MARKET WIRE) -- September 14, 2005 -- Carrier Access Corporation (NASDAQ: CACSE), a manufacturer of broadband communications equipment, reported results yesterday for its first quarter ended March 31, 2005 and today for its second quarter ended June 30, 2005.

Revenue for the first quarter of fiscal 2005 was $14.7 million compared with $28.5 million for the first quarter of fiscal 2004. Net loss for the first quarter of 2005 was $5.0 million, or $0.15 per diluted share compared with net income for the first quarter of fiscal 2004 of $2.9 million, or $0.09 per diluted share.

Revenue for the second quarter of fiscal 2005 was $18.9 million compared with $29.5 million for the second quarter of fiscal 2004. Net loss for the second quarter of 2005 was $1.4 million, or $0.04 per diluted share compared with net income for the second quarter of fiscal 2004 of $2.9 million or $0.08 per diluted share.

The Company ended the second quarter with $101.6 million in cash, cash equivalents and marketable securities.

In addition, the Company filed its Quarterly Reports on Forms 10-Q for the first quarter of fiscal 2005 on September 13, 2005, and for the second quarter of fiscal 2005 today, with the Securities and Exchange Commission.

The Company had previously announced that it requested and received an exception from the NASDAQ Listing Qualifications Panel to file its quarterly financial results for the quarter ended June 30, 2005 on September 13, 2005. Yesterday, the Company sought an additional one-day exception from the NASDAQ Listing Qualifications Panel until September 14, 2005 to file its Form 10-Q for the quarter ended June 30, 2005. There can be no assurance, however, that the Panel will grant any additional exception.

Carrier Access president, CEO and chairman Roger Koenig stated: "Although our quarterly revenues were less than those reported in 2004, we believe we made good progress from the first to the second quarter in coming closer to profitability. We increased our gross margins and decreased our net loss, while absorbing significant legal and accounting expenses associated with our restatements. We continue to view 2005 positively."

Koenig further added: "We are excited about our FLEXengine technology introduction and are very pleased with its reception by major wireless customers and partners. We continue to believe that we are well positioned in our Converged Access and Wireless Access markets and that we will benefit in these areas as VoIP and 3G service implementations continue to grow."

Carrier Access will hold a conference call on Thursday, September 15, at 4:30 p.m. EDT to review first and second quarter results. The call is open to the public. Those who wish to participate should dial 630-395-0023, domestically or internationally, at least fifteen minutes prior to the scheduled start time for the call and reference Carrier Access. Investors may listen to a live audio webcast of the conference call at www.carrieraccess.com. An online replay of the conference call, as well as the text of the Company's earnings release, will be available on the Investor Relations site at http://www.carrieraccess.com.

About Carrier Access Corporation

Carrier Access (NASDAQ: CACSE) provides consolidated access technology designed to streamline the communication network operations of service providers, enterprises and government agencies. Carrier Access products enable customers to consolidate and upgrade access capacity, and implement converged IP services while lowering costs and accelerating service revenue. Carrier Access' technologies help our customers do more with less. For more information, visit www.carrieraccess.com.

Forward-Looking Statement Caution

This press release contains forward-looking statements about improvements in our operating results from the first to second quarter of 2005 and our positive view for the remainder of 2005. Our results of operations for the first and second quarter of fiscal 2005 and quarter over quarter improvement in operating results are not necessarily indicative of the results that may be expected for the remainder of 2005. We caution that actual results may differ materially from those indicated or implied by these forward-looking statements as a result of various important factors including, but not limited to, continuing uncertainty regarding general economic conditions, changes in capital spending by carriers and telecommunications companies, market acceptance of our products, problems with or at our customers, distributors, OEM's and/or suppliers, growth rates within our industry, the financial stability of our customers, the introduction of new competition and technologies, and other risks and uncertainties including those factors discussed in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2004, and in our Forms 10-Q for the quarters ended March 31, 2005 and June 30, 2005 filed with the Securities and Exchange Commission. We do not undertake any obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise.



                       CARRIER ACCESS CORPORATION
            CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                (in thousands, except per share amounts)

                                    December 31,    March 31,    June 30,
                                       2004           2005         2005
                                     ---------     ---------    ---------
ASSETS
Current assets:
  Cash and cash equivalents          $  46,753     $  42,365    $  45,088
  Marketable securities
   available for sale                   61,930        61,654       56,549
  Accounts receivable, net              11,949        11,883       14,710
  Deferred income taxes                    363           289          289
  Inventory, net                        32,009        33,187       31,693
  Prepaid expenses and other             4,674         4,384        3,060
                                     ---------     ---------    ---------
   Total current assets                157,678       153,762      151,389

Property and equipment, net             12,239        12,135       11,933
Goodwill                                 7,588         7,588        7,588
Intangibles, net                         6,412         6,104        5,795
Other assets                               218           228          245
                                     ---------     ---------    ---------
   Total assets                     $  184,135    $  179,817   $  176,950
                                     =========     =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                   $  11,246     $  11,147     $  8,682
  Accrued compensation payable           2,917         3,260        3,646
  Accrued expenses and other
   liabilities                           1,468         1,787        2,259
                                     ---------     ---------    ---------
   Total current liabilities            15,631        16,194       14,587
Deferred income taxes                      363           289          289
                                     ---------     ---------    ---------
Total liabilities:                      15,994        16,483       14,876
                                     ---------     ---------    ---------

Stockholders' equity:
Common stock                                34            35           35
Additional paid-in capital             188,147       188,595      188,677
Accumulated deficit                    (19,910)      (24,920)     (26,368)
Accumulated other comprehensive loss      (130)         (376)        (270)
                                     ---------     ---------    ---------
   Total stockholders' equity          168,141       163,334      162,074
                                     ---------     ---------    ---------

   Total liabilities and
    stockholders' equity            $  184,135    $  179,817   $  176,950
                                     =========     =========    =========


                       CARRIER ACCESS CORPORATION
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                (in thousands, except per share amounts)

                            Three Months Ended      Three Months Ended
                                 March 31,               June 30,
                             2005        2004        2005        2004
                           --------    --------    --------    --------
                                    (As Restated)           (As Restated)

Revenue, net               $ 14,696    $ 28,538    $ 18,925    $ 29,549
Cost of sales                 9,590      15,448      11,281      16,274
                           --------    --------    --------    --------

  Gross profit                5,106      13,090       7,644      13,275
                           --------    --------    --------    --------

Operating expenses:
  Research and development    4,799       3,975       4,257       4,692
  Sales and marketing         3,324       4,579       3,208       4,047
  General and
   administrative             1,683       1,718       2,035       1,800
  Bad debt expense
   (recoveries)                 328        (183)         58         (98)
  Restructuring charges         369                                  92
  Intangible asset
   amortization                 307         348         307         307
                           --------    --------    --------    --------

Total operating expenses     10,810      10,437       9,865      10,840
                           --------    --------    --------    --------

Income (loss) from
 operations                  (5,704)      2,653      (2,221)      2,435

Other income, net               694         219         772         491
                           --------    --------    --------    --------

Income before income taxes   (5,010)      2,872      (1,449)      2,926

Income tax expense
 (benefit)                        -          15           -          52
                           --------    --------    --------    --------

Net income (loss)          $ (5,010)   $  2,857    $ (1,449)   $  2,874
                           ========    ========    ========    ========


Income per share:
  Basic                    $  (0.15)   $   0.10    $  (0.04)   $   0.09
  Diluted                  $  (0.15)   $   0.09    $  (0.04)   $   0.08

Weighted average common
 shares:
  Basic                      34,502      29,318      34,663      33,744
  Diluted                    34,502      31,724      34,663      35,790


                             Six Months Ended
                                 June 30,
                             2005        2004
                           --------    --------
                                    (As Restated)

Revenue, net               $ 33,621    $ 58,087
Cost of sales                20,871      31,723
                           --------    --------

  Gross profit               12,750      26,364

Operating expenses:

  Research and development    9,058       8,662
  Sales and marketing         6,532       8,625
  General and
   administrative             3,715       3,524
  Bad debt expense
   (recoveries)                 386        (281)
  Restructuring charges         369          92
  Intangible asset
   amortization                 614         654
                           --------    --------

Total operating expenses     20,674      21,276
                           --------    --------

Income (loss) from
 operations                  (7,924)      5,088

Other income, net             1,466         711
                           --------    --------

Income before income taxes   (6,458)      5,799

Income tax expense
 (benefit)                        -          67
                           --------    --------

Net income (loss)          $ (6,458)   $  5,732
                           ========    ========


Income per share:
  Basic                    $  (0.19)   $   0.18
  Diluted                  $  (0.19)   $   0.17

Weighted average common
 shares:
  Basic                      34,592      32,010
  Diluted                    34,592      34,243


                      CARRIER ACCESS CORPORATION
       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                            (in thousands)

                             Three Months Ended         Six Months Ended
                                  March 31,                 June 30,
                              2005        2004          2005        2004
                           ---------   ---------     ---------   ---------
Cash flows from                          (As                       (As
 operating activities:                 Restated)                 Restated)

Net income (loss)          $  (5,010)  $   2,857     $  (6,458)  $   5,732
Adjustments to reconcile
 net income to net cash
 provided by operating
 activities:
  Depreciation and
   amortization expense        1,031       1,206         2,045       2,287
  Provision for
   (recoveries of)
   doubtful accounts, net        328        (183)          386        (281)
  Gain on sale of property         -           -             -        (143)
  Stock-based compensation         -           5            47           5
  Changes in operating
   assets and liabilities:
    Accounts receivable         (262)        796        (3,147)      4,889
    Income taxes receivable       75           -            94           -
    Inventory                 (1,178)     (2,290)          366      (4,716)
    Prepaid expenses
     and other                   205         604         1,490       1,675
    Accounts payable and
     accrued expenses            563        (330)       (1,043)     (2,800)
                           ---------   ---------     ---------   ---------
  Net cash provided (used) by
    operating activities      (4,248)      2,665        (6,271)      6,648

Cash flows from
 investing activities:
Purchases of property
 and equipment                  (619)       (552)       (1,119)     (1,137)
Proceeds from sale
 of property                       -           -             -         368
Net cash paid in the
 purchase of Paragon               -        (100)            -        (350)
Purchases of
 marketable securities       (21,632)    (17,000)      (29,488)    (55,946)
Sales and maturities of
 marketable securities
 available for sale           21,662      14,971        34,729      27,658
                           ---------   ---------     ---------   ---------
      Net cash used by
       investing activities     (589)     (2,681)        4,122     (29,407)
                           ---------   ---------     ---------   ---------

Cash flows from
 financing activities:
Proceeds from stock offering       -      83,607             -      83,607
Stock issuance costs               -      (5,055)            -      (5,227)
Proceeds from exercise
 of stock options                449         976           484       1,623
                           ---------   ---------     ---------   ---------
      Net cash provided by
       financing activities      449      79,528           484      80,003

Net increase (decrease) in
 cash and cash equivalents    (4,388)     79,512        (1,665)     57,244
Cash and cash equivalents
 at beginning of period       46,753      10,107        46,753      10,107
                           ---------   ---------     ---------   ---------
Cash and cash equivalents
 at end of period          $  42,365   $  89,619     $  45,088   $  67,351
                           =========   =========     =========   =========

Contact Information

  • Contact:
    Audra Bailey
    (303) 218-5455