Q4 Revenue Rises 20 Percent Over Q3
SAN JOSE, Calif., Jan. 24 /PRNewswire/ -- SDL, Inc. (Nasdaq: SDLI) today
announced record revenues of $175.6 million and pro forma net income of
$48.2 million, or $0.53 per diluted share, for the fourth quarter ended
December 31, 2000. Revenue for the full year was a record $504.8 million and
pro forma net income was $132.8 million, or $1.55 per diluted share.
Driven by continued strong growth in shipments of products for fiber optic
communication systems, fourth quarter revenue was triple that reported for the
year earlier quarter ended December 31, 1999 and 20 percent higher than
revenue in the third quarter of 2000. Revenue from fiber optic communications
products increased 22 percent over the third quarter and by 265 percent over
the prior year quarter, and represented a record 92 percent of total revenue.
Sequential growth remained strong in both terrestrial (up 21 percent) and
undersea (up 26 percent) sectors of the fiber optic communications business.
Including merger expenses, purchased intangible amortization charges,
non-cash stock compensation expense and payroll tax on stock options, the
company reported a net loss of $122.8 million, or $1.41 per share, for the
quarter.
On a pro forma basis, SDL reported fourth quarter net income of
$48.2 million, or $0.53 per share, an increase of 277 percent over the
$12.8 million, or $0.17 per share, pro forma net income for the quarter ended
December 31, 1999. Pro forma operating income rose by 20 percent over Q3
2000, and increased by more than five times over such income for the prior
year quarter. The fourth quarter pro forma operating margin remained at a
record 39.4 percent of revenue.
For the calendar year, total revenue was $504.8 million, up 170 percent
over the $187.0 million accomplished in 1999. Sales of fiber optic
communications products grew by a factor of 3.6, or 257 percent, and
represented 89 percent of the year's total revenue compared to 67 percent in
1999. Pro forma net income in 2000 was $132.8 million, or $1.55 per diluted
share, up 321 percent from the $31.6 million, or $0.46 per diluted share,
earned in 1999.
The following table summarizes pro forma results for the quarters ended
December 31, 2000 and 1999.
(in millions, except share amounts) Three months ended
December 31
2000 1999
Revenues $175.6 $58.7
Gross margin (a) 99.7 26.1
Income from operations (a) 69.3 13.2
Income before income taxes (a) 75.9 17.5
Net income (a) 48.2 12.8
Net income per diluted share (a) $0.53 $0.17
Diluted weighted average shares outstanding 91.0 75.4
(a) Pro forma results for the quarter ended December 31, 2000 exclude
merger costs incurred to date associated with the pending merger with
JDS Uniphase, amortization of purchased intangible assets, non-cash
stock compensation expenses and payroll taxes on stock option
exercises. Pro forma results for the quarter ended December 31, 1999
exclude amortization of purchased intangible assets and non-cash stock
compensation expenses.
Commenting on the quarter's performance, SDL's Chairman and Chief
Executive Officer, Donald R. Scifres said, "SDL's record financial performance
in the fourth quarter reflects our product diversification and technical
leadership position in multiple sectors of the fiber optics communications
market. Demand remained strong in both terrestrial and undersea sectors,
generating record bookings and backlog. Export sales into the Asia-Pacific
region were particularly strong in Q4, rising over 100 percent sequentially.
Reflecting the worldwide demand and competitiveness of our product lines,
international revenue represented a record 59 percent of total revenue in Q4."
"It is also very gratifying to observe our success in broadening our
customer base, especially for amplifier products and AWG-based multiplexers,"
Scifres continued. "In Q4, we had eight customers with over $10 million
revenue and 20 customers with over $1 million revenue. There is clearly a new
set of customers ramping output which require SDL's leading edge products."
Statements in this press release which are not historical including
statements regarding SDL's or management's intentions, hopes, beliefs,
expectations, representations, projections, plans or predictions of the future
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements include statements regarding
the company's leadership position in multiple sectors of the fiber optics
communications market. It is important to note that the Company's actual
results could differ materially from those in any such forward-looking
statements. Factors that could cause actual results to differ materially
include risks related to the company's inability to expand manufacturing
facilities successfully to meet customer demand, the company's inability to
meet customer demand with its existing facilities, uncertainties in
competition and in customer demand for the company's products, and the risk
factors listed from time to time in the Company's SEC reports including but
not limited to, the annual report on Form 10-K for the year ended December 31,
1999, and Form 10-Q for the quarters ended March 31, June 30 and September 30,
2000.
SDL's products power the transmission of data, voice and Internet
information over fiber optic networks to meet the needs of telecommunications,
data transmission, dense wavelength division multiplexing (DWDM) and cable
television applications. They enable customers to meet the bandwidth needs of
increasing Internet, data, video and voice traffic by expanding their fiber
optic communications networks much more quickly and efficiently than would be
possible using conventional electronic and optical technologies. SDL's
optical products also serve a variety of non-communications applications,
including materials processing and printing. Additional information about
SDL, Inc. is available on the Internet at http://www.sdli.com .
You are urged to read the joint proxy statement-prospectus included in JDS
Uniphase Corporation's Registration Statement on Form S-4 in connection with
the pending merger of JDS Uniphase and SDL, Inc. filed with the SEC because
the proxy statement-prospectus and the Registration Statement on Form S-4
contain important information. You can get copies of the joint proxy
statement-prospectus and the Registration Statement on Form S-4 and any other
relevant documents, for free at the SEC's web site, and copies of reports,
proxy statement and other information regarding JDS Uniphase or SDL filed with
the SEC are available free from the companies. Requests for documents
relating to SDL should be directed to SDL, Inc., 80 Rose Orchard Way, San
Jose, California 95134, Attention: Investor Relations, Telephone
(408) 943-4343. Requests for documents relating to JDS Uniphase should be
directed to JDS Uniphase Corporation, 210 Baypointe Parkway, San Jose,
California 95134, Attention: Investor Relations, Telephone 408-434-1800.
Investors will have the opportunity to listen to SDL's earnings release
conference call over the Internet at
http://www.vcall.com/NASApp/VCall/EventPage?ID=61281 or on SDL's Web site at
http://www.sdli.com under Investor Relations. The call will be available live on
both the VCall and SDL Web sites beginning today at 2:00 p.m. PST, and a
replay will be available immediately following completion of the live call
through February 2, 2001. In addition, investors will have the opportunity to
access a telephone replay of the call through February 2 by dialing
703-925-2435.
SDL, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data - unaudited)
Three Months Ended Year Ended
December, 31 December 31,
2000 1999 2000 1999
Total revenues $175,601 $58,677 $504,835 $187,021
Cost of revenues 76,756 32,576 239,644 107,238
Gross profit 98,845 26,101 265,191 79,783
Operating expenses
Research and development 13,450 5,733 40,136 19,043
Selling, general and
administrative 19,653 8,045 58,582 26,695
Merger costs 851 - 4,019 2,677
In-process research
and development - - 27,400 1,495
Amortization of purchased
intangibles 151,307 210 376,005 809
Total operating expenses 185,261 13,988 506,142 50,719
Operating income (loss) (86,416) 12,113 (240,951) 29,064
Interest income, net 6,663 4,257 22,126 5,429
Income (loss) before
income taxes (79,753) 16,370 (218,825) 34,493
Provision for
income taxes 43,093 4,375 76,341 9,280
Net income (loss) ($122,846) $11,995 ($295,166) $25,213
Net income (loss)
per share - basic ($1.41) $0.17 ($3.63) $0.39
Net income (loss)
per share - diluted ($1.41) $0.16 ($3.63) $0.37
Number of weighted
average shares - basic 87,357 71,022 81,308 64,320
Number of weighted
average shares - diluted 87,357 75,374 81,308 68,470
SDL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2000 1999
(unaudited) (a)
Assets
Current assets:
Cash, cash equivalents and marketable
securities $414,136 $314,136
Accounts receivable, net 112,273 41,445
Inventory 66,550 32,070
Other current assets 12,662 3,659
Total current assets 605,621 391,310
Property and equipment, net 125,591 59,772
Intangible assets 2,639,991 2,948
Other assets 7,670 6,923
$3,378,873 $460,953
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $38,093 $18,277
Other accrued liabilities 56,753 17,770
Total current liabilities 94,846 36,047
Long-term liabilities 6,198 4,758
Stockholders' equity 3,277,829 420,148
$3,378,873 $460,953
(a) Derived from audited financial statements included in the Company's
Annual Report Form on 10-K filed with the Securities and Exchange
Commission.
SDL, Inc.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data - unaudited)
Three Months Ended December 31, 2000
Pro Forma
As Reported Adjustments Pro Forma
Total revenues $175,601 $- $175,601
Cost of revenues (a) 76,756 (834) 75,922
Gross profit 98,845 834 99,679
Operating expenses
Research and development (a) 13,450 (1,436) 12,014
Selling, general and
administrative (a) 19,653 (1,251) 18,402
Merger costs (b) 851 (851) -
Amortization of purchased
intangibles (c) 151,307 (151,307) -
Total operating expenses 185,261 (154,845) 30,416
Operating income (loss) (86,416) 155,679 69,263
Interest income, net 6,663 - 6,663
Income (loss) before
income taxes (79,753) 155,679 75,926
Provision for income taxes (d) 43,093 (15,382) 27,711
Net income (loss) ($122,846) $171,061 $48,215
Net income (loss)
per share - basic ($1.41) $0.55
Net income (loss)
per share - diluted ($1.41) $0.53
Number of weighted average
shares - basic 87,357 87,357
Number of weighted average
shares - diluted 87,357 91,024
(a) Adjusted to exclude $3,521,000 of stock compensation expense and
payroll taxes on stock options
(b) Adjusted to exclude $851,000 of costs incurred to date associated with
the pending merger with JDS Uniphase
(c) Adjusted to exclude amortization of purchased intangible assets
(d) Adjusted to exclude income tax effects of (a), (b) and (c) to derive a
pro forma effect tax rate of 36.5 percent
SDL, Inc.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data - unaudited)
Year Ended December 31, 2000
Pro Forma
As Reported Adjustments Pro Forma
Total revenues $504,835 $- $504,835
Cost of revenues (a) 239,644 (10,137) $229,507
Gross profit 265,191 10,137 275,328
Operating expenses
Research and development (a) 40,136 (4,663) 35,473
Selling, general and
administrative (a) 58,582 (5,758) 52,824
Merger costs (b) 4,019 (4,019) -
In-process research and
development (c) 27,400 (27,400) -
Amortization of purchased
intangibles (d) 376,005 (376,005) -
Total operating expenses 506,142 (417,845) 88,297
Operating income (loss) (240,951) 427,982 187,031
Interest income, net 22,126 - 22,126
Income (loss) before
income taxes (218,825) 427,982 209,157
Provision for income taxes 76,341 - 76,341
Net income (loss) ($295,166) $427,982 $132,816
Net income (loss) per
share - basic ($3.63) $1.63
Net income (loss) per
share - diluted ($3.63) $1.55
Number of weighted
average shares - basic 81,308 81,308
Number of weighted average
shares - diluted 81,308 85,458
(a) Adjusted to exclude $20,558,000 of stock compensation expense and
payroll taxes on stock options
(b) Adjusted to exclude $4,019,000 of costs incurred to date associated
with the pending merger with JDS Uniphase
(c) Adjusted to exclude in process R&D charges
(d) Adjusted to exclude amortization of purchased intangible assets
SDL, Inc.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data - unaudited)
Three Months Ended December 31, 1999
Pro Forma
As Reported Adjustments Pro Forma
Total revenues $58,677 $- $58,677
Cost of revenues 32,576 - 32,576
Gross profit 26,101 - 26,101
Operating expenses
Research and development 5,733 - 5,733
Selling, general and
administrative (a) 8,045 (884) 7,161
Amortization of purchased
intangibles (b) 210 (210) -
Total operating expenses 13,988 (1,094) 12,894
Operating income 12,113 1,094 13,207
Interest income, net 4,257 - 4,257
Income before income taxes 16,370 1,094 17,464
Provision for income taxes (c) 4,375 291 4,666
Net income $11,995 $803 $12,798
Net income per share - basic $0.17 $0.18
Net income per share - diluted $0.16 $0.17
Number of weighted average
shares - basic 71,022 71,022
Number of weighted average
shares - diluted 75,374 75,374
(a) Adjusted to exclude $884,000 of non-cash stock compensation expense
(b) Adjusted to exclude amortization of purchased intangible assets
(c) Adjusted to exclude (a) and (b) to derive a pro forma effective tax
rate of 24 percent for the twelve months ended December 31,
1999
SDL, Inc.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data - unaudited)
Year Ended December 31, 1999
Pro Forma
As Reported Adjustments Pro Forma
Total revenues $187,021 $- $187,021
Cost of revenues (a) 107,238 (700) 106,538
Gross profit 79,783 700 80,483
Operating expenses
Research and development 19,043 - 19,043
Selling, general and
administrative (b) 26,695 (1,359) 25,336
Merger costs (c) 2,677 (2,677) -
In-process research
and development (d) 1,495 (1,495) -
Amortization of purchased
intangibles (e) 809 (809) -
Total operating expenses 50,719 (6,340) 44,379
Operating income 29,064 7,040 36,104
Interest income, net 5,429 - 5,429
Income before income taxes 34,493 7,040 41,533
Provision for income taxes (f) 9,280 682 9,962
Net income $25,213 $6,358 $31,571
Net income per share - basic $0.39 $0.49
Net income per share - diluted $0.37 $0.46
Number of weighted average
shares - basic 64,320 64,320
Number of weighted average
shares - diluted 68,470 68,470
(a) Adjusted to exclude $700,000 one-time charge related to the
acquisition of Polaroid's fiber laser business in February 1999
(b) Adjusted to exclude $1,359,000 of non-cash stock compensation expense
(c) Adjusted to exclude merger costs related to the pooling of interests
transaction with IOC
(d) Adjusted to exclude in-process R&D charges
(e) Adjusted to exclude amortization of purchased intangible assets
(f) Adjusted to exclude (a), (b), (c), and (e) to derive a pro forma
effective tax rate of 24 percent
SOURCE SDL, Inc.
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Related links:
http://www.sdli.com
CONTACT:
Donald R. Scifres, Chairman and CEO, or
Michael L. Foster, VP Finance and CFO, of SDL, Inc.,
408-943-9411; or general, Lisa Horn Chainey, investors, James
Hoyne, or media, Dawn Swidorski, all of The Financial Relations
Board, 415-986-1591
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