Operating Income Increases 135 Percent Excluding Acquisition Charges
SAN JOSE, Calif., April 27 /PRNewswire/ -- SDL, Inc. (Nasdaq: SDLI) today
announced record revenues and income before acquisition-related charges for
the first quarter ended March 31, 1999. Record revenues of $35.7 million were
up 41 percent from the $25.4 million reported in the first quarter of 1998.
SDL reported net income for first quarter 1999 of $3.0 million or $0.19
per share on a diluted basis. As announced on February 10, the quarter's
costs include $2.2 million of charges, or $0.14 per share, related to the
acquisition of Polaroid's fiber laser business completed in February 1999.
Excluding acquisition-related charges, and as illustrated in the table
below, SDL earned record operating profit of $6.2 million, representing a 135
percent increase from the same period in 1998. Net income, on a pro-forma
basis, was a record $5.1 million, or $0.33 per diluted share, up 87 percent
from $2.7 million, or $0.19 per diluted share, in the first quarter of 1998.
The first quarter diluted earnings per share were computed on 15.5 million
shares, compared to 14.5 million shares in 1998.
(in thousands, except
per share amounts) 1999 1998
Revenues $35,730 $25,357
Gross margin (a) 14,754 8,207
Income from operations (b) 6,209 2,646
Income before income taxes 6,479 2,919
Net income (c) 5,054 2,699
Net income per diluted share (c)$0.33 $0.19
Diluted weighted average
shares outstanding 15,509 14,545
(a) Gross margin for the quarter ended March 31, 1999, excludes
$0.7 million related to the acquisition of Polaroid's fiber laser
business in February 1999.
(b) Income from operations for the quarter ended March 31, 1999, also
excludes an additional $1.5 million in one-time charges related to the
acquisition of Polaroid's fiber laser business, for a total of
$2.2 million.
(c) Net income for the first quarter ended March 31,1999, reflects an
effective tax rate of 22 percent on income before taxes. For the
quarter ended March 31, 1998, an effective tax rate of 7.5 percent on
income before taxes has been applied.
Commenting on the quarter's performance, SDL's Chairman and Chief
Executive Officer Donald R. Scifres said, "Our first quarter results indicate
the continued strength in our commercial communications product lines.
Revenue from sale of fiber optic products for dense wavelength division
multiplexing systems tripled, rising 204 percent from the prior year quarter
and up 41 percent sequentially. Overall communications revenues grew by 117
percent from the year earlier quarter and were up 32 percent versus the fourth
quarter of 1998. Seventy-two percent of our total revenue came from
communications applications in the quarter."
Scifres continued, "Our earnings also benefited from our increased focus
on sales of our higher margin communications products, our higher production
levels over which to spread fixed costs, and our emphasis on improved
manufacturing efficiencies. Excluding one-time charges, these factors led to
a nine-point year over year, and 2.6-point sequential gross margin
improvement. We are very pleased to see the results of our strategy to
leverage our excellent technology base to focus on the high growth
communications sector while increasing our manufacturing capacity."
SDL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data - unaudited)
Three months ended
March 31
1999 1998
Total revenue $35,730 $25,357
Cost of revenue (a) 21,676 17,150
Gross margin 14,054 8,207
Operating expenses:
Research and development 3,348 2,476
Selling, general and
administrative 5,018 2,889
Amortization of purchased
intangibles 179 196
In process research
and development (b) 1,495 --
Total operating expenses 10,040 5,561
Operating income 4,014 2,646
Interest income, net 270 273
Income before income taxes 4,284 2,919
Provision for income taxes 1,274 220
Net income $3,010 $2,699
Net income per share
-- basic $ 0.21 $ 0.20
Net income per share
-- diluted $ 0.19 $ 0.19
Number of weighted average
shares - basic 14,479 13,708
Number of weighted average
shares - diluted 15,509 14,545
(a) Includes one-time charges of $0.7 million related to the Polaroid
fiber laser acquisition inthe quarter ended March 31, 1999.
(b) One-time charges related to the Polaroid fiber laser acquisition.
SDL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
1999 1998
(unaudited)
Assets
Current assets:
Cash, cash equivalents and
marketable securities $19,358 $25,864
Accounts receivable, net 27,593 22,070
Inventory 22,651 19,679
Other current assets 3,181 3,306
Total current assets 72,783 70,919
Property and equipment, net 38,218 32,931
Long-term marketable securities -- 3,552
Other assets 7,534 5,075
$118,535 $112,477
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $7,981 $ 9,385
Other accrued liabilities 7,752 7,176
Total current liabilities 15,733 16,561
Long-term liabilities 3,580 2,669
Stockholders' equity 99,222 93,247
$118,535 $112,477
SOURCE SDL, Inc.
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CONTACT:
Donald R. Scifres, Chairman and CEO, or
Michael L. Foster, VP Finance and CFO, of SDL, Inc.,
408-943-9411; or general info, Lisa Horn Chainey, investors,
Kristi Larson, or media, Scott Marx, 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 (U.S.) or 908-544-2850 (Int'l), ticker
SDLI
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