EX-99.1 3 b77332exv99w1.htm EX-99.1 TEXT OF PRESS RELEASE, DATED SEPTEMBER 24, 2009, TITLED "3COM REPORTS RESULTS FOR FIRST QUARTER FISCAL YEAR 2010" exv99w1
Exhibit 99.1
(3COM LOGO)
FOR IMMEDIATE RELEASE
For more information contact:
     
Investor Relations
   Media Relations
Gene Skayne
   Beth Cossette
508.323.1080
   781.782.5715
gene_skayne@3com.com
   beth_cossette@lpp.com
3Com Reports Results for First Quarter Fiscal Year 2010
MARLBOROUGH, MASS.—September 24, 2009—3Com Corporation (Nasdaq: COMS) today reported financial results for its fiscal 2010 first quarter, which ended August 28, 2009. Revenue in the quarter was $290.5 million, compared to revenue of $342.7 million in the corresponding period in fiscal 2009, a 15.2 percent decrease.
     Net income in the quarter was $7.5 million, or $0.02 per diluted share, compared with net income of $79.8 million, or $0.20 per diluted share, in the first quarter of fiscal year 2009. Fiscal year 2009 first quarter results included a $70.0 million favorable patent dispute resolution, representing a benefit of $0.17 per diluted share. On a non-GAAP basis, net income for the first quarter of fiscal year 2010 was $30.6 million, or $0.08 per diluted share, compared with net income of $43.4 million, or $0.11 per diluted share, for the first quarter of fiscal year 2009.
     3Com generated $16.9 million in cash from operations in the quarter. 3Com’s cash and equivalents and short term investments balance at August 28, 2009 was $665.8 million.
     “We are pleased with 3Com’s start to our new fiscal year,” said Bob Mao, 3Com’s Chief Executive Officer. “We had a very good quarter, delivering solid revenue performance, improving gross margin over the prior year, and continuing to generate cash from operations.”
- more -
     Management will host a conference call and Webcast at 8:30 a.m. EDT, Thursday, September 24, 2009, to discuss the company’s financial results and business outlook. To participate on the call, U.S. and international parties may dial (913) 312-1453. Alternatively, interested parties may listen to the live broadcast of the call over the Internet at 3Com’s Investor Relations Web site (www.3com.com/investor) in the Earnings Webcast section.

 

 

3Com Reports Results for First Quarter Fiscal 2010, p. 2
     For those unable to participate on the live call, a replay will be available starting at 12:30 p.m. EDT on September 24, 2009 by dialing (719) 457-0820 or (888) 203-1112, Confirmation Code: 4218350. A replay will also be available over the Internet at 3Com’s Investor Relations Web site (www.3com.com/investor) in the Earnings Webcast section. The replay will be available for approximately three weeks after posting.
     Additional financial information is available on the Investor Relations section of our Web site.
Safe Harbor
This news release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including forward-looking statements regarding our business objectives and goals. These statements are neither promises nor guarantees, but involve risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including, without limitation, risks relating to: our ability to grow profitably, expand outside of China, maintain and expand in China, improve expense controls while making investments to grow and other risks detailed in the Company’s filings with the SEC, including those discussed in the Company’s annual report filed with the SEC on Form 10-K for the fiscal year ended May 29, 2009.
3Com Corporation does not intend, and disclaims any obligation, to update any forward-looking information contained in this release or with respect to the announcements described herein.
The non-GAAP measures used by the Company exclude restructuring, amortization, stock-based compensation expense and, if applicable in the relevant period, unusual items, such as those items detailed in the tables attached to this press release. The required reconciliations and other disclosures for all non-GAAP measures used by the Company are set forth later in this press release, in the Current Report on Form 8-K furnished to the SEC on the date hereof and/or in the investor relations section of our Web site, www.3com.com.
References to the financial information included in this news release reflect rounded numbers and should be considered approximate values.
About 3Com Corporation
3Com Corporation is a $1.3 billion global enterprise networking solutions provider that sets a new price/performance standard for customers. 3Com has three global brands—H3C, 3Com, and TippingPoint—that offer high-performance networking and security solutions to enterprises large and small. The H3C enterprise networking portfolio—a market leader in China—includes products that span from the data center to the edge of the network, while TippingPoint network-based intrusion prevention systems and network access control solutions deliver in-depth, no-compromise application, infrastructure and performance protection.
Copyright© 2009 3Com Corporation. 3Com, the 3Com logo, H3C and TippingPoint are registered trademarks of 3Com Corporation or its wholly owned subsidiaries in various countries around the world. All other company and product names may be trademarks of their respective holders.

 

 

3Com Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
TABLE A
                 
    Three Months Ended  
    August 28,     August 29,  
    2009     2008  
Sales
   $ 290,502     $ 342,650  
Cost of sales
     123,931       153,023  
 
            
 
                
Gross profit
     166,571       189,627  
 
                
Operating expenses (income):
                
Sales and marketing
     84,788       87,482  
Research and development
     38,968       47,147  
General and administrative
     21,370       24,454  
Amortization of intangibles
     17,071       25,164  
Patent dispute resolution
     —       (70,000 )
Restructuring charges
     1,133       1,997  
 
            
Operating expenses, net
     163,330       116,244  
 
            
 
                
Operating income
     3,241       73,383  
 
                
Interest expense, net
     (1,088 )     (1,251 )
Other income, net
     11,547       12,871  
 
            
 
                
Income from operations before income taxes
     13,700       85,003  
 
                
Income tax provision
     (6,239 )     (5,166 )
 
            
 
                
Net income
   $ 7,461     $ 79,837  
 
            
 
                
Basic and diluted income per share
   $ 0.02     $ 0.20  
 
            
 
                
Shares used in computing basic per share amounts
     389,774       402,889  
 
                
Shares used in computing diluted per share amounts
     396,266       404,072  

 

 

3Com Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
TABLE B
                 
    August 28,     May 29,  
    2009     2009  
ASSETS
                
 
                
Current assets:
                
Cash and equivalents
   $ 625,908     $ 545,818  
Short term investments
     39,915       98,357  
Notes receivable
     46,926       40,590  
Accounts receivable, net
     101,536       112,771  
Inventories, net
     86,232       90,395  
Other current assets
     47,229       56,982  
 
            
 
                
Total current assets
     947,746       944,913  
 
                
Property & equipment, net
     38,228       40,012  
Goodwill
     609,297       609,297  
Intangibles, net
     181,578       198,624  
Deposits and other assets
     24,860       22,511  
 
            
 
                
Total assets
   $ 1,801,709     $ 1,815,357  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 67,928     $ 68,350  
Current portion of long-term debt
     88,000       48,000  
Accrued liabilities and other
     360,369       394,103  
 
            
 
                
Total current liabilities
     516,297       510,453  
 
                
Deferred taxes and long-term obligations
     41,328       40,729  
Long-term debt
     112,000       152,000  
Stockholders’ equity
     1,132,084       1,112,175  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 1,801,709     $ 1,815,357  
 
            

 

 

3Com Corporation
Reconciliation of Non-GAAP Financial Measures
(in thousands, except margin and per-share data)
(unaudited)
TABLE C
                 
    Three Months Ended  
    August 28,     August 29,  
    2009     2008  
GAAP net income
   $ 7,461     $ 79,837  
Restructuring
     1,133       1,997  
Amortization of intangibles
     17,071       25,164  
Patent dispute resolution [a]
     —       (70,000 )
Stock-based compensation expense [b]
     4,885       6,442  
 
            
Non-GAAP net income
   $ 30,550     $ 43,440  
 
            
 
                
GAAP net income per share
   $ 0.02     $ 0.20  
Restructuring
     0.00       0.00  
Amortization of intangibles
     0.04       0.06  
Patent dispute resolution [a]
     —       (0.17 )
Stock-based compensation expense [b]
     0.02       0.02  
 
            
Non-GAAP net income per share, diluted
   $ 0.08     $ 0.11  
 
            
Shares used in computing diluted per share amounts
     396,266       404,072  
 
[a]   Resolution of Realtek patent dispute.
 
[b]   Stock-based compensation expense is included in the following cost and expense categories by period:
                 
    Three Months Ended  
    August 28,     August 29,  
    2009     2008  
Cost of sales
     540       758  
Sales and marketing
     1,590       1,758  
Research and development
     476       884  
General and administrative
     2,279       3,042