Page one of seven pages.
Exhibit Index is on page four.
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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
Date of Report (Date of earliest event reported): January 20, 2000
Commission File Number 0-15323
NETWORK EQUIPMENT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2904044
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6500 Paseo Padre Parkway
Fremont, California 94555
(510) 713-7300
(Address of principal executive offices, including zip code, area code,
and telephone number)
[Not Applicable]
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(Former Name or Former Address, if Changed Since Last Report.)
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Item 5. Other Events
On January 20, 2000, Network Equipment Technologies, Inc. (the
"Company") announced plans for a reorganization of the Company. Attached
hereto as Exhibit 99.1 is the Company's press release dated January 20,
2000 regarding this announcement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Network Equipment Technologies, Inc. Press Release dated
January 20, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: January 26, 2000 NETWORK EQUIPMENT TECHNOLOGIES, INC.
By: /s/ Hubert A.J. Whyte
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Name: Hubert A.J. Whyte
Title: President and Chief Executive Officer
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EXHIBIT INDEX
Page No. in Sequentially
Exhibit No. Description Numbered Current Report
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99.1 Network Equipment Technologies, Inc. 5
Press Release dated January 20, 2000.
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[GRAPHIC OMITTED] PRESS RELEASE
N.E.T.
6500 PASEO PADRE
PARKWAY
FREMONT, CA 94555
TEL: 510-574-2476
FAX: 510-574-4011
FOR IMMEDIATE RELEASE: Media Contact:
John Batty, CFO
(510) 574-2450
Brenda Ropoulos
(510) 574-2508
N.E.T. Reorganizes to Accelerate Broadband Development
Fremont, CA, January 20, 2000 -- N.E.T. (NYSE: NWK), a leading supplier of
multiservice wide area networking equipment, announced today that it has
initiated an aggressive reorganization of the company to focus on its broadband
strategy and more effectively manage its narrowband business. The reorganization
includes creation of two business units: one dedicated to delivering N.E.T.'s
broadband strategy, and the other to manage the continuing opportunities in the
narrowband market. The goal is to operate the broadband unit in a start up-like
environment while the narrowband unit will be operated to support the company's
multiservice networking customers, government business and partners worldwide.
In addition, the company will consolidate its sales and service team in
Vienna, Virginia where it has existing facilities to support customers. This
will increase efficiencies and reduce duplication within the organization.
"It is very evident that circuit to packet migration is occurring much
more rapidly than we anticipated. N.E.T.'s future success depends on our ability
to effectively deliver on our broadband strategy," said Bert Whyte, president
and CEO of N.E.T. "We have great narrowband technology and yet we must work to
manage this business more effectively. We already have a talented engineering
team with experience and expertise in voice, ISDN, Frame Relay and ATM
technologies. Our recent acquisition of FlowWise Networks adds IP skills to this
team. This reorganization provides N.E.T. with the platform to successfully
deliver on a strategy that could capture a significant piece of the broadband
market opportunity."
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As part of this reorganization and focus on market opportunities, the
company is reducing its workforce by approximately 30 percent worldwide.
Management believes the new business unit structure, however, will enable the
company to better respond to market dynamics and customer requirements.
According to John Batty, N.E.T.'s CFO, "We have had the capability to
support significantly greater revenue than we have achieved. This restructuring
brings our organization more into line with our current prospects, and enables
us to put our resources into the areas where we believe we can achieve the
greatest impact for our efforts. The reorganization is expected to result in
annualized savings of approximately $32 million over fiscal year 2001 compared
to Q3 2000 run rates. The company expects to incur a $12 million restructuring
charge in the fourth quarter of fiscal year 2000. The key, however, is the
retooling of our organization to focus on the opportunities at hand."
N.E.T.'s broadband proposition is initially centered around the company's
existing technology, the Promina 4000, which provides a superior ATM switching
fabric as noted in recent testing by The Tolly Group. Additional engineering
goals have been targeted for the second and fourth quarters of this year with
efforts that will give it a unique yet vital role in the development of the next
generation broadband network for service providers. The company will announce
its broadband product strategy at the service provider-focused SuperComm trade
show in June of this year.
"We have every opportunity for success," concluded Whyte. "The broadband
market is beginning to emerge, we have a compelling product strategy, we have
the principal technology elements and we have the experience in building
networks. Our challenge is to execute on our broadband strategy. I believe
N.E.T. is up to the challenge and our people understand the renewed focus this
reorganization brings."
About N.E.T.
Network Equipment Technologies, Inc. (N.E.T.), headquartered in Fremont,
CA, is a leading worldwide supplier of multiservice wide area networks used by
service providers, government organizations and enterprises in more than 75
countries. N.E.T. multiservice WANs
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and ATM products integrate voice, data, and video traffic with ATM, frame relay,
IP and ISDN capabilities. The company is certified to the worldwide ISO 9001
standard for design, manufacturing and service. Join us at the first address in
networking: http://www.net.com for further information.
Statements made in this press release, including those related to
prospects for the expansion of and markets for broadband technology and the
change in the market for narrowband or circuit technology, the significance to
N.E.T. of the FlowWise acquisition, the Company's broadband strategy, estimated
cost reductions from the restructuring, the restructuring charge expected in the
Company's fourth quarter, and the impact of the reorganization on the Company
are forward-looking. Investors are cautioned that these statements are based
upon current expectations, forecasts and assumptions that involve risks and
uncertainties that may cause actual results, events and/or company performance
to differ materially. Among other risks and uncertainties, the narrowband market
may change more rapidly than anticipated and/or the broadband market may not
expand as quickly as anticipated, in either case impacting N.E.T. revenue.
Additionally, N.E.T. may not realize the anticipated benefits from the FlowWise
acquisition due to an inability to successfully integrate the FlowWise products
and/or engineers and/or because competition, technology changes and other
factors may force changes in N.E.T.'s broadband strategy that may impact the
significance of the FlowWise acquisition. N.E.T. may not be able to successfully
implement its proposed organizational changes, these organizational changes may
not have the desired effect, or N.E.T. may lose a significant number of
employees as a result of the organizational changes thereby impacting its
ability to be successful in the broadband market. Additionally, the
telecommunications equipment industry is highly volatile and characterized by
rapid technology changes and the entrance of numerous start-up companies, making
it difficult to predict with certainty the direction of this market. Cost
reductions and the expected restructuring charges are estimates based upon
preliminary information and certain assumptions that management believes appear
to be reasonable at this time. In addition to the factors set forth in this
Release, the factors identified in N.E.T.'s filings with the Securities and
Exchange Commission, including Forms 10-K, 10-Q and 8-K as applicable, could
also affect the forward-looking statements contained in this press release.
N.E.T. disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
# # #
N.E.T. is a trademark and the N.E.T. logo is a registered trademark of Network
Equipment Technologies, Inc.
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