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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
JANUARY 22, 1998
DIGITAL LIGHTWAVE, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-21669 95-4313013
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or Identification No.)
organization)
601 Cleveland Street, Fifth Floor
Clearwater, Florida 33775
(813) 442-6677
(Address, including zip code, of principal executive offices and Registrant's
telephone number, including area code)
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Item 5. Other Events
On January 22, 1998, the Company issued the following press release describing a
restatement of its financial statements related to its second and third fiscal
quarters of its fiscal year ended December 31, 1997.
Item 7. Financial Statements and Exhibits
(c) Exhibits Description
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Exhibits No. Press release dated January 22, 1998
99.1
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Digital Lightwave, Inc.
Date: January 22, 1998 /s/ Dr. Bryan J. Zwan
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Chief Executive Officer
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DIGITAL LIGHTWAVE, INC.
601 Cleveland St.
Fifth Floor
Clearwater, Florida 33755
NASDAQ: DIGL
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AT THE COMPANY: AT FRB:
Seth Joseph George Zagoudis Jordan Darrow Laura Kuhlman-Doerer
Senior Executive Vice President General Info. Analyst Contract Media Contact
813.442.667 312.640.6663 212.661.8030 312.641.6727
[email protected] [email protected] [email protected] [email protected]
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FOR IMMEDIATE RELEASE
THURSDAY, JANUARY 22, 1998
DIGITAL LIGHTWAVE TO RESTATE REVENUES FROM PRIOR QUARTERS; REPORTS
PRELIMINARY FOURTH QUARTER RESULTS
CLEARWATER, FL, JANUARY 22, 1998 - Digital Lightwave, Inc. (Nasdaq: DIGL) said
today that it will restate its revenues downward for the second and third
quarters of 1997 to approximately $2.7 million from $5.3 million and to
approximately $1.4 million from $8.3 million, respectively. The Company further
stated that it anticipated that it would report revenues of approximately $4.8
million for the fourth quarter of 1997 and a net loss for the quarter of between
$1.2 and $1.5 million or $.05 and $.07 per share. After giving effect to the
restatement, the company expects to report sales of approximately$10.3 million
for the full 1997 year and record a loss of approximately $5.5 to $5.7 million
for the year, or $0.21 to $0.23 per share.
After giving effect to the restatement, firm backlog and deferred revenue at
the end of 1997, was $6.0 million in the aggregate. In addition to the firm
backlog and deferred revenue, the company noted that its anticipated results
for the fourth quarter were adversely affected by a lenghtening of the sales
cycle for certain key customers which delayed anticipated fourth quarter orders
in an aggregate amount of approximately $6.8 million.
The company's decision to restate the 1997 results of operations resulted from
the discovery of certain errors in the timing of revenue recognition and a
review of related accounting policies and procedures. The company also announced
that after consideration of the uncertainty in various international markets,
the company has instituted a policy of deferring recognition of revenues on
sales to international distributors until the product is actually sold by each
distributor to its end user customer. The company further noted that it has
revised certain of its accounting policies and procedures regarding the timing
of its recognition of sales to end user customers. A committee consisting of the
outside members of the company's board of directors has been established to
review the policies, procedures and circumstances which may have been factors in
the restatement of revenue and make recommendations regarding further accounting
policy and procedure adjustments and related courses of action. The company
expects the release of additional and more definitive information concurrent
with the filing of its Form 10-K.
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Steven H. Grant, the company's recently appointed chief financial officer and
vice president of finance said, "We have initiated tighter monitoring and
control procedures to ensure strict compliance with the company's revenue
recognition policy moving forward."
"We are implementing measures to ensure full compliance with revenue
recognition policies and procedures which we believe to be appropriate in light
of the company's experience and the current environment," said Dr. Bryan J.
Zwan, chief executive officer of the company. "In addition, we will seek to
obtain better visibility of our customers' needs and their purchasing processes
through the addition of senior and middle sales management and new marketing
leadership. We also plan to reduce our rate of recruitment of other staff and
expenses in order to better align with the rate of top line growth we have been
experiencing." Commenting on the fourth quarter, Dr. Zwan state, "The company
was able to achieve certain of its goals during the fourth quarter, including
the addition of new customers and the successful completion of two trials of the
REMOTE ACCESS AGENTS. The company ended the year with approximately $24 million
in cash and a determination to focus on the further penetration and expansion
of our customer base in 1998."
Digital Lightwave develops, manufactures, and sells products that provide
intelligent termination, integration and switching of lightwave communications.
The company's products include Network Information Computers for field
installation and maintenance which simultaneously process multiple protocols to
verify and qualify the performance of SONET, ATM and T-Carrier networks and
transmission equipment, and Remote Access Agents for unattended,
software-controlled passive monitoring as well as active stress testing to
remotely identify network segment and channel degradation, and to provide a real
time management information base for Wide Area Networks. The company is
headquartered in Clearwater, Florida. Digital Lightwave can be located at the
Internet at http://www.lightwave.com.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED
IN THIS NEWS RELEASE ARE FORWARD-LOOKING STATEMENTS MADE PURSUANT TO THE SAFE
HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, SUCH AS QUARTERLY
FLUCTUATIONS IN OPERATING RESULTS, THE TIMELY AVAILABILITY OF NEW PRODUCTS, THE
IMPACTS OF COMPETITIVE PRODUCTS AND PRICING, AND OTHER RISKS AND UNCERTAINTIES
SET FORTH IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE RISKS AND UNCERTAINTIES COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM ANY FORWARD-LOOKING STATEMENTS MADE IN THIS NEWS RELEASE.
