SAN JOSE, Calif., Feb. 3 /PRNewswire/ -- SDL, Inc. (Nasdaq: SDLI) today
announced record revenues and earnings for the fourth quarter and year ended
December 31, 1998.
For the fourth quarter ended December 31, 1998, SDL reported record
revenues of $29.4 million compared to $24.8 million in the fourth quarter
1997. Fourth quarter 1998 net income more than doubled, rising 125 percent to
$4.1 million, or $0.28 per share on a diluted basis, compared to net income of
$1.8 million, or $0.13 per share on a diluted basis, reported for the fourth
quarter 1997. Diluted earnings per share were computed on 14.9 million shares
compared to 14.4 million shares in 1997.
For the year ended December 31, 1998, SDL reported record revenue of
$106.1 million and net income of $12.8 million, or $0.87 per share on a
diluted basis, compared to revenues of $91.4 million and a net loss of
$24.7 million, or $1.83 per share on a diluted basis, for 1997. Shares used
in the computation of diluted per share amounts for 1998 were 14.7 million
shares compared to 13.5 million shares in 1997.
Commenting on the quarter, Donald R. Scifres, chairman and chief executive
officer, said, "We are very pleased by the growth of our communications
product lines. Driven by demand in the long haul terrestrial sector, our
communications products represented 66 percent of our total fourth quarter
revenue versus 47 percent in the same quarter last year. The demand for our
flagship 980 nm pump modules has grown over 100 percent over the past 12
months, attributable largely to the start of installation of dense wavelength
division multiplexed (DWDM) fiber optic networks that provide increased
throughput for the growing data, voice and Internet traffic. We also
initiated production on the first undersea fiber optic supply contract during
the quarter. We expect to continue to increase production levels on this
contract in early 1999."
"Our increased focus on higher margin communications products, plus steady
improvements in our manufacturing efficiencies, helped to boost gross margins
to 38.7 percent in the quarter as compared to 36.1 percent and 34.5 percent in
the previous two quarters respectively," Scifres continued. "In fiscal 1999,
we will remain dedicated to sustaining strong margins, in part, by expanding
our DWDM product line, upgrading manufacturing capabilities, and strengthening
our customer relationships."
SDL designs, manufactures and markets fiber optic-related products, lasers
and optoelectronic-based systems. The company's products are used in a
diversity of markets such as telecommunications, cable television, dense
wavelength division multiplexing, satellite communications, printing, medical
and materials processing markets.
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 anticipated 1999 increase in production levels of undersea fiber optic
products, expansion in the DWDM product line, upgrading of manufacturing
facilities and strengthening customer relationships. Reasons why actual
results might differ include risks related to the company's inability to
increase yields and production levels, inability to expand product lines,
delay or inability in upgrading manufacturing facilities, and inability to
strengthen customer relationships. All forward-looking statements are made as
of today, and SDL disclaims any duty to update such statements. It is
important to note that the Company's actual results could differ materially
from those projected in such forward-looking statements. Additional
information concerning factors that could cause actual results to differ
materially from those in the forward-looking statements is contained from time
to time in the Company's annual report on Form 10-K for the 1997 fiscal year,
the quarterly reports on Forms 10-Q for the first three quarters of 1998, and
other SEC filings. Copies of these filings may be obtained by contacting SDL
or the SEC.
SDL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data -- quarter results unaudited)
Three Months Ended Years Ended
December 31 December 31
1998 1997 1998 1997(A)
Total revenues $29,400 $24,827 $106,138 $ 91,364
Cost of revenues 18,032 16,478 68,419 65,154
Gross Margin 11,368 8,349 37,719 26,210
Operating expenses:
Research and development 2,834 2,145 10,690 9,794
Selling, general and
administrative 4,179 3,735 13,599 40,609
Amortization of purchased
intangibles 193 184 775 671
In-process research and
development -- 753 -- 753
Total operating expenses 7,206 6,817 25,064 51,827
Operating income(loss) 4,162 1,532 12,655 (25,617)
Interest(income), net (294) (352) (1,211) (1,355)
Income(loss) before
income taxes 4,456 1,884 13,866 (24,262)
Provision for income taxes 337 50 1,043 417
Net income(loss) $4,119 $1,834 $12,823 $(24,679)
Net income(loss) per share
- basic $0.29 $0.13 $0.92 $(1.83)
Net income(loss) per share
- diluted $0.28 $0.13 $0.87 $(1.83)
Number of weighted average
shares - basic 14,125 13,642 13,887 13,497
Number of weighted average
shares - diluted 14,925 14,444 14,709 13,497
(A) Includes one-time charges totaling $30,911.
SDL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AS PERCENTAGE OF TOTAL REVENUE
(In thousands, except per share data - quarter results unaudited)
The following table sets forth certain operating results expressed as a
percentage of total revenue for the periods indicated.
Three Months Ended Years Ended
December 31 December 31
1998 1997 1998 1997(A)
Total revenues 100.0% 100.0% 100.0% 100.0%
Cost of revenues 61.3% 66.4% 64.5% 71.3%
Gross Margin 38.7% 33.6% 35.5% 28.7%
Operating expenses:
Research and development 9.6% 8.6% 10.1% 10.7%
Selling, general and
administrative 14.2% 15.0% 12.8% 44.5%
Amortization of purchased
intangibles 0.7% 0.8% 0.7% 0.7%
In-process research and
development 0.0% 3.0% 0.0% 0.8%
Total operating expenses 24.5% 27.4% 23.6% 56.7%
Operating income(loss) 14.2% 6.2% 11.9% (28.0%)
Interest(income), net (1.0%) (1.4%) (1.2%) (1.6%)
Income(loss) before income
taxes 15.2% 7.6% 13.1% (26.6%)
Provision for income taxes 1.2% 0.2% 1.0% 0.4%
Net income(loss) 14.0% 7.4% 12.1% (27.0)
(A) Includes one-time charges totaling $30,911.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31,
1998 1997
(B) (B)
Assets
Current assets:
Cash, cash equivalents and
short-term cash investments $25,864 $14,993
Accounts receivable, net 22,070 19,960
Inventory 19,679 13,938
Other current assets 3,306 2,738
Total current assets 70,919 51,629
Property and equipment, net 32,931 26,298
Long-term cash investments 3,552 11,613
Other assets (including
purchased intangibles) 5,075 4,684
$112,477 $94,224
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $9,385 $8,469
Accrued liabilities 7,176 7,148
Total current liabilities 16,561 15,617
Long-term liabilities 2,669 2,020
Stockholders' equity 93,247 76,587
$112,477 $94,224
(B) Derived from audited financial statements
SOURCE SDL, Inc.
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CONTACT:
Donald R. Scifres, Chairman and CEO, or
Michael L. Foster, VP Finance and CFO, both of SDL, Inc.,
408-943-9411; or general info, Lisa Horn Chainey or Jose Mallabo,
investors, Kristi Larson, media, Scott Marx, all of The Financial
Relations Board, 415-986-1591
NOTE TO EDITORS: For more information on SDL, Inc. at no cost,
please call 800-PRO-INFO or 908-544-2850 if calling from outside
the U.S., ticker symbol SDLI
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