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Exhibit 99.1
FOR IMMEDIATE RELEASE
JULY 20, 2000
INTERSPEED REVENUES UP SHARPLY
IN FISCAL THIRD QUARTER
DSL ACCESS ROUTER COMPANY EXCEEDS REVENUE
AND EPS EXPECTATIONS IN QUARTER ENDED JUNE 30
NORTH ANDOVER, MA, JULY 20 - Interspeed, Inc. (Nasdaq: ISPD) reported sharply
higher revenue and reduced losses for the fiscal third quarter ended June 30,
2000. Both revenue and operating results for the quarter exceeded analysts'
expectations.
The company, a leading supplier of digital subscriber line (DSL) access routers
that enable high-speed networking over copper telephone lines, announced gross
revenue for the third quarter ended June 30, 2000 of $7,007,000, compared to
$950,000 for the third quarter of fiscal 1999, and a substantial increase from
the revenue reported in the previous quarter this year.
Pro forma net loss for the fiscal year 2000 third quarter, excluding aggregate
non-cash stock-related charges of $285,000, was $1,897,000, or $0.17 per basic
and diluted share, compared to pro forma net loss of $1,875,000, or $0.23 per
basic and diluted share, in the third quarter of the prior fiscal year. Net loss
for the three months ended June 30, 2000 was $2,182,000, or $0.20 per basic and
diluted share, compared to a net loss of $3,725,000, or $0.47 per basic and
diluted share, for the same period a year ago.
The majority of revenue in the quarter ended June 30, 2000 was from a single
customer, Intelligent Public Network of Australia. A portion of that revenue was
non-recurring resale of third-party products. The gross margin calculated for
the quarter, without this historically greater proportion of third-party product
revenue, would have been 45% versus the 34% reported.
For the nine months ended June 30, 2000, gross revenue increased to $14,162,000,
compared to $1,341,000 for the first nine months of fiscal 1999. Net revenue for
the current nine-month period, excluding a $439,000 charge for warrants, was
$13,723,000.
Pro forma net loss for the nine months of fiscal year 2000, excluding non-cash
warrant-related charges and stock compensation expense of $1,288,000 and
$988,000 respectively, was $6,304,000, or $0.58 per basic and diluted share,
compared to a pro forma net loss of $5,130,000, or $0.64 per basic and diluted
share, for the nine months ended June 30, 1999. Net loss for the nine months
ended June 30, 2000, was $8,580,000, or $0.79 per basic and diluted share,
compared to a net loss of $7,074,000, or $0.88 per basic and diluted share, for
the same period of fiscal 1999.
"The quarter ended June 30, 2000 was perhaps the most important in the company's
brief history. We signed a number of third-party partner agreements as part of
our newly launched SolutionXpert partners program to drive the delivery of total
product solutions for our customers; such solutions are essential for success in
a fast-paced, high-demand market. We booked, built and shipped our largest
order, one that validates the high-performance access router technology we are
pursuing. We learned to expedite many aspects of the sales, installation and
turnover processes that can otherwise slow a company's momentum. Our
international business in this quarter was unusually strong. The value of DSL
technology in transforming simple telephone lines into high-speed communications
channels for all users, quickly and easily, is becoming apparent in both the
U.S. and
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international mass markets. We believe Interspeed is well-positioned for
continued solid performance," Stephen Ide, founder and president of Interspeed,
commented. (more)
ABOUT INTERSPEED INC.
Interspeed (HTTP://WWW.INTERSPEED.COM/) designs, develops and markets advanced
high-speed data communications solutions based on digital subscriber line
technology. Its products enable data communication service providers, such as
competitive local exchange carriers, Internet service providers, and owners of
multi-tenant units to utilize the existing copper wire infrastructure to deliver
high-speed data access to their customers. Interspeed offers the industry's only
single platform system that integrates the principal components required for DSL
service, including signal concentration, routing, switching and network
management. Unlike traditional DSL products, Interspeed's products offer
customers a scalable and flexible solution at a lower cost of ownership.
NOTE TO INVESTORS
Except for historical information contained in this release, there may be
forward-looking statements that do not give full weight to all potential risks,
including but not limited to, product demand and market acceptance,
international market factors, and sales order timing and processing. Actual
results may differ materially. Additional information concerning these risks and
other factors is contained in the "Risk Factors" section of Interspeed, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 filed with
the Securities and Exchange Commission on May 15, 2000.
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FOR ADDITIONAL INFORMATION, CONTACT:
Interspeed, Inc. The Strayton Group, Inc. for Interspeed
Bill Burke, Chief Financial Officer Rob Strayton
978-688-6164 508-655-6965
[email protected] [email protected]
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July 20, 2000
TABULAR FINANCIAL INFORMATION FOLLOWS
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INTERSPEED, INC.
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
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<CAPTION>
Three months ended Nine months ended
June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Gross revenue $ 7,007 $ 950 $14,162 $ 1,341
Less sales discounts -warrants -- -- 439 --
-------- -------- -------- --------
Net revenue 7,007 950 13,723 1,341
Cost of revenue 4,596 514 8,558 826
-------- -------- -------- --------
Gross profit 2,411 436 5,165 515
Operating expenses:
Research and development 1,793 1,335 5,385 3,747
Sales and marketing 1,980 440 4,998 796
General and administrative 646 536 2,022 1,102
Stock compensation 285 1,850 988 1,944
Warrant charges -- -- --
Total operating expenses 4,704 4,161 14,242 7,589
Interest income 111 -- 497 --
-------- -------- -------- --------
Net loss $ (2,182) $ (3,725) $ (8,580) $ (7,074)
======== ======== ======== =========
Net loss per share-basic and diluted $ (0.20) $ (0.47) $ (0.79) $ (0.88)
======== ======== ======== =========
Shares used to computed net loss
per share - basic and diluted 10,891 8,001 10,793 8,001
Pro forma net loss $ (1,897) $ (1,875) $ (6,304) $ (5,130)
======== ======== ======== =========
Pro forma net loss per share
-basic and diluted $ (0.17) $ (0.23) $ (0.58) $ (0.64)
======== ======== ======== =========
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Pro forma results exclude non-cash charges relating to the issuance of warrants
to certain customers and stock compensation expense.
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INTERSPEED, INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
JUNE 30, 2000 SEPTEMBER 30, 1999
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(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash $ 6,426 $ 21,227
Accounts receivable 10,233 808
Inventory 3,284 2,445
Prepaid expenses and other 244 168
-------- --------
Total current assets 20,187 24,648
Property and equipment, net 1,972 1,178
Other assets -- 54
-------- --------
Total assets $ 22,159 $ 25,880
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 4,350 $ 2,789
Accrued expenses and deferred revenue 1,462 688
Note due Brooktrout -- 129
-------- --------
Total current liabilities 5,812 3,606
Deferred rent 154 104
Total stockholders' equity 16,193 22,170
-------- --------
Total liabilities and stockholders' equity $ 22,159 $ 25,880
======== ========
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