EX-99.1 2 0002.txt PRESS RELEASE DATED 10/17/2000 EXHIBIT 99.1 FOR IMMEDIATE RELEASE Xircom Announces Fiscal 2000 and Fourth-Quarter Results Reports Record Quarterly Revenues of $134.1 Million and Quarterly Earnings of $.39 Per Share, Excluding Acquisition-Related Costs THOUSAND OAKS, Calif., October 17, 2000 -- Xircom, Inc. (Nasdaq: XIRC) today reported record net sales and record earnings for its fiscal year ended September 30, 2000. Net sales for the year were $496.2 million, a 17% increase compared to $424.4 million for the prior year. Net income, excluding acquisition-related costs and special charges, was $53.7 million, or $1.76 per share, an increase of 42% compared to $37.9 million, or $1.48 per share, for fiscal 1999. Including acquisition-related costs and special charges, net income was $25.0 million, or $.82 per share. An analyst call will be held at 4:30 PM, Eastern Time today to discuss these results and the Company's outlook. The dial in number for this call is 212-896-6053, reservation number 16454845. Replay options are available on Xircom's website at www.xircom.com/earnings. ----------------------- Fourth-Quarter Results. Net sales for the fourth quarter of fiscal 2000 grew to a record $134.1 million, a 16% increase compared to $115.6 million for the same period last year, and a 6% increase compared to the $126.7 million for the prior quarter. Net income, excluding acquisition-related costs and special charges, was $12.2 million, or $.39 per share, compared with $11.0 million, or $.42 per share, in the same period last year, and $14.8 million, or $.47 per share, for the prior quarter. Including acquisition-related costs and special charges, net income was $9.6 million, or $.31 per share. Acquisition-related costs consist of the write-off of in-process research and development, non- recurring acquisition-related charges, and ongoing amortization of goodwill Xircom Announces Fourth-Quarter 2000 Results - Page 2 and other acquisition-related intangibles from transactions completed in prior periods. Special charges consist of provision for customer insolvency and other unusual items. Positioned for leadership in the exploding wireless market. "In 2000 we put in place the key elements that will position the Company as the unique supplier of both wired and wireless data access solutions for the mobile technology user," said Dirk Gates, chairman, president, and chief executive officer of Xircom. "We will leverage our position today as the leading provider of wired data connectivity for mobile users to become the leading provider of wireless data access solutions for the mobile market," said Gates. "Our recent acquisition of Omnipoint Technologies Inc. is already paying dividends - our first two Wireless Wide Area Networking (WWAN) products have officially passed GSM FTA (Formal Type Approval). Additionally, we see the market for wired access solutions moving to the embedded Mini PCI form factor. We are working aggressively to translate our dominant share in PC Cards into leading share in this market, and will evolve our business model to ensure our competitiveness in this space," said Gates. Fiscal 2000 Highlights: . Announced a series of key industry partnerships and an acquisition that will firmly position the Company as a unique provider of both wired and wireless data access solutions. . Acquired Omnipoint Technologies Inc. (OTI) from VoiceStream Wireless Corporation (Nasdaq: VSTR), enhancing Xircom's wireless position by adding General Packet Radio Service (GPRS) products and technology to its Wireless Wide Area Network (WWAN) data solutions. . Teamed with Cisco Systems, (Nasdaq: CSCO), the leader in networking for the Internet, to cooperate in the development, marketing, and sales of mobile Wireless Local Area Networking (WLAN) adapters based on the IEEE 802.11b wireless Ethernet standard. . Gained the number one market share position in total PC Card Ethernet and Modem connections with a 15-point annual gain and a total of 46 percent market share. . Expanded our line of access card products to include solutions for the Visor(TM) handheld market with the introduction of the SpringPort(TM) Modem 56 GlobalACCESS Xircom Announces Fourth-Quarter 2000 Results - Page 3 . Springboard(TM) module, the first international high-speed 56K V.90 modem for the Handspring(TM) Visor. . Entered the broadband and home networking markets with the introduction of the PortStation(TM) next-generation, expandable ADSL USB Modem. . Extended our RealPort(TM) Integrated PC Card family with the RealPort2(TM) Integrated PC Card, enabling notebook users to create customized mobile information access solutions. . Introduced the industry's first all-in-one conference room networking solution, NetStation(TM), offering mobile users access to their corporate network from a conference room, eliminating the need for expensive customized networking furniture. . Announced two stock repurchase programs, for a total of 2.5 million shares completing the repurchase of 1.6 million shares as of September 30, 2000. About Xircom, Inc. For over a decade mobile professionals around the world have relied on Xircom for access to their information anytime, anywhere. Xircom designs and develops innovative solutions that connect mobile users worldwide to corporate networks, the Internet, Intranets and other online resources. Xircom sells and supports its products in over 100 countries through distributors, resellers, electronic channels and global OEM partnerships. Headquartered in Thousand Oaks, Calif., with regional headquarters in Belgium, Japan and Singapore, Xircom has 1,900 employees worldwide and trailing four-quarter revenue of $496 million. Please visit http://www.xircom.com for more information. -------------- # # # Xircom Announces Fourth-Quarter 2000 Results - Page 4 For more information contact: Kristi Cushing Xircom Investor Relations (805) 376-9300 kristi.cushing@us.xircom.com http://www.xircom.com Notice to Readers. This news release contains certain forward-looking statements based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, the timing and success of new product introductions, the Company's ability to implement and execute upon changes in its business model compared to historical operations, the introduction and adoption of applicable wide area network wireless technologies by service providers, the introduction and adoption of wireless technologies which may compete with wireless technologies used by the Company, and the market acceptance by users of applicable wide area, personal area, and/or local area network wireless technologies. Other additional risks are described in the company's SEC reports on Form 10-K for the fiscal year ended September 30, 2000 (to be filed subsequent to this release), as well as the reports on Form 10-Q for the quarters ended June 30, 2000, March 31, 2000 and December 31, 1999, the company's reports on Form 8-K filed on July 18, 2000, June 28, 2000, June 15, 2000, April 20, 2000, March 24, 2000, January 19, 2000 and November 10, 1999, and the company's most recent registration statement on Form S-3 filed on December 22, 1999. Investor information may be found on Xircom's web site at www.xircom.com or on the SEC's EDGAR electronic filing database. Xircom Announces Fourth-Quarter 2000 Results - Page 5 Xircom, Inc. Condensed Consolidated Income Statements (In thousands, except per share information)
(Unaudited) Three months ended Year ended September 30 September 30 2000 1999 2000 1999 -------- -------- -------- -------- Net sales $134,132 $115,627 $496,199 $424,436 Cost of sales 78,197 63,907 279,318 243,248 -------- -------- -------- -------- Gross profit 55,935 51,720 216,881 181,188 Operating expenses: Research and development 12,793 7,049 37,847 24,557 Sales and marketing 24,298 24,397 96,512 87,348 General and administrative 5,662 4,464 19,648 15,143 In-process research and development and other nonrecurring acquisition-related charges - 2,232 22,400 2,232 Amortization of goodwill and other acquisition-related intangibles 2,803 - 4,565 - Special charges - 2,364 4,150 2,364 -------- -------- -------- -------- Total operating expenses 45,556 40,506 185,122 131,644 -------- -------- -------- -------- Operating income 10,379 11,214 31,759 49,544 Other income, net 3,130 469 9,332 1,785 -------- -------- -------- -------- Income before income taxes 13,509 11,683 41,091 51,329 Income tax provision 3,937 4,012 16,063 16,724 -------- -------- -------- -------- Net income $ 9,572 $ 7,671 $ 25,028 $ 34,605 ======== ======== ======== ======== Diluted earnings per share $ .31 $ .29 $ .82 $ 1.35 Diluted earnings per share, excluding acquisition-related costs and special charges $ .39 $ .42 $ 1.76 $ 1.48 Weighted average shares outstanding 31,335 26,192 30,606 25,682 ----------------------------------------------------------------------------------------------------------------- Net sales 100.0% 100.0% 100.0% 100.0% Gross profit 41.7% 44.7% 43.7% 42.7% Research and development 9.6% 6.1% 7.6% 5.8% Sales and marketing 18.1% 21.1% 19.4% 20.6% General and administrative 4.2% 3.8% 4.0% 3.5% Acquisition-related costs and special charges 2.1% 4.0% 6.3% 1.1% -------- -------- -------- -------- 34.0% 35.0% 37.3% 31.0% Operating income 7.7% 9.7% 6.4% 11.7% Operating income, excluding acquisition-related costs and special charges 9.8% 13.7% 12.7% 12.8% Net income 7.1% 6.6% 5.0% 8.2%
Xircom Announces Fourth-Quarter 2000 Results - Page 6 Xircom, Inc. Information Excluding Acquisition-Related Costs and Special Charges (Unaudited) (In thousands, except per share information) The following supplemental information excludes acquisition-related costs and special charges consisting of in-process research and development and other nonrecurring acquisition-related charges, ongoing amortization of goodwill and other acquisition-related intangibles, provision for customer insolvency, and other special charges. This information is not prepared in accordance with generally accepted accounting principles.
Three months ended Year ended September 30 September 30 2000 1999 2000 1999 ---- ---- ---- ---- Operations excluding acquisition-related costs and special charges: Operating expenses $ 42,753 $ 35,910 $154,007 $127,048 Operating income $ 13,182 $ 15,810 $ 62,874 $ 54,140 Net income $ 12,234 $ 10,980 $ 53,739 $ 37,914 Diluted earnings per share $ .39 $ .42 $ 1.76 $ 1.48 ------------------------------------------------------------------------------------------------------------- Operating expenses 31.9% 31.2% 31.1% 29.9% Operating income 9.8% 13.7% 12.7% 12.8% Income tax rate 25.0% 32.3% 25.6% 32.2% Net income 9.1% 9.5% 10.8% 8.9%
Xircom Announces Fourth-Quarter 2000 Results - Page 7 Xircom, Inc. Condensed Consolidated Balance Sheets (In thousands)
September 30, 2000 September 30, 1999 ------------------ ------------------ Current assets: Cash and short term investments $ 308,489 $ 135,630 Accounts receivable 53,203 38,012 Income tax receivable 2,377 300 Inventories 24,483 23,563 Deferred income taxes 14,674 15,195 Other current assets 9,045 9,696 ---------- ---------- Total current assets 412,271 222,396 Property and equipment, net 74,734 40,536 Other assets 54,544 12,564 -------- -------- Total assets $ 541,549 $ 275,496 ======== ======== Current liabilities: Notes payable $ - $ 9,138 Accounts payable 34,014 31,591 Accrued liabilities 39,442 42,235 Accrued income taxes - 3,952 -------- -------- Total current liabilities 73,456 86,916 Deferred income taxes 17,134 13,660 Shareholders' equity: Common stock 30 24 Paid-in capital 402,930 151,925 Retained earnings 47,999 22,971 ---------- ---------- Total shareholders' equity 450,959 174,920 ---------- ---------- Total liabilities and shareholders' equity $ 541,549 $ 275,496 ========== ==========