Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
[x] Quarterly Report pursuant Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period to .
------------ ------------
Commission File Number 0-21766
BroadBand Technologies, Inc.
Delaware 56-1615990
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4024 Stirrup Creek Drive, Durham, N.C. 27703
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (919) 544-0015
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ___X___ No_______
Indicate the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest feasible date.
Classes Outstanding as of November 8, 1996
- -------
Common Stock ($.01 par Value) 13,245,540
<PAGE>
BroadBand Technologies, Inc.
Index
<TABLE>
<CAPTION>
PAGE NO.
-------------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Balance Sheets
September 30, 1996 and December 31, 1995 3
Condensed Statements of Income
Three Months Ended September 30, 1996 and 1995 5
Condensed Statements of Income
Nine Months Ended September 30, 1996 and 1995 6
Condensed Statements of Cash Flows 7
Nine Months Ended September 30, 1996 and 1995
Notes to Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 11
PART II - OTHER INFORMATION
Item 5. Other Information 14
SIGNATURE 16
</TABLE>
2
<PAGE>
BroadBand Technologies, Inc.
Condensed Balance Sheets
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
--------------------------------------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash, cash equivalents and short term investments
(Notes 2 and 3) $155,059,172 $65,350,943
Accounts receivable, trade 2,597,097 4,313,465
Inventories (net) (Note 4) 1,084,253 2,007,362
Prepaid expenses and other current assets 803,113 692,171
-----------------------------------
Total current assets 159,543,635 72,363,941
Property, plant and equipment, at cost 26,635,458 23,827,633
Less allowance for depreciation and amortization (14,114,899) (10,233,135)
-----------------------------------
12,520,559 13,594,498
Deferred debt issuance costs (Note 8) 3,663,489 0
-----------------------------------
Total assets $175,727,683 $ 85,958,439
====================================
</TABLE>
See notes to condensed financial statements.
3
<PAGE>
BroadBand Technologies, Inc.
Condensed Balance Sheets
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
----------------------- -----------------------
(Unaudited) (Audited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $9,541,104 $10,410,803
Accrued warranty reserve 4,158,064 2,758,743
Deposits 3,558,313 5,418,776
Deferred revenue 6,125,000 8,193,970
Current installments of capitalized leases 56,422 264,447
---------------------- -----------------------
Total current liabilities 23,438,903 27,046,739
Capitalized leases, excluding current installments 0 43,420
Long term debt (Note 8) 115,000,000 0
Stockholders' equity:
Common stock, $.01 par value: 30,000,000 shares
authorized; 13,242,938 shares issued and outstanding
at September 30, 1996; and 13,151,167 shares
issued and outstanding at December 31, 1995.
132,429 131,512
Additional paid-in capital 161,895,545 160,927,240
Accumulated deficit (124,739,194) (102,190,472)
------------------------ ----------------------
Total stockholders' equity 37,288,780 58,868,280
------------------------ ----------------------
Total liabilities and stockholders' equity $175,727,683 $85,958,439
======================== ======================
</TABLE>
See notes to condensed financial statements.
4
<PAGE>
BroadBand Technologies, Inc.
Condensed Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPT. 30,
1996 1995
------------ -------------
<S> <C> <C>
Net sales $5,706,049 $7,064,725
Cost and expenses:
Cost of sales 5,312,621 7,164,799
Research and development 6,174,046 4,462,731
Selling, general and administrative expenses 2,928,640 2,859,018
------------ -------------
14,415,307 14,486,548
------------ -------------
Loss from operations (8,709,258) (7,421,823)
Interest income 1,858,960 1,053,103
Interest expense (1,648,131) (16,572)
------------ -------------
Loss before income taxes (8,498,429) (6,385,292)
Income taxes 0 0
------------ -------------
Net Loss $(8,498,429) $(6,385,292)
============= =============
Net loss per share (Note 5) $ (.64) $ (.49)
============= =============
Average number of shares and equivalents 13,241,090 13,109,019
============= =============
</TABLE>
See notes to condensed financial statements.
5
<PAGE>
BroadBand Technologies, Inc.
Condensed Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPT. 30,
1996 1995
------------------- ------------------
<S> <C> <C>
Net sales $15,217,611 $15,741,346
Cost and expenses:
Cost of sales 14,792,755 17,133,051
Research and development 16,317,449 14,114,536
Selling, general and administrative expenses 8,170,545 8,641,662
------------------- ------------------
39,280,749 39,889,249
------------------- ------------------
Loss from operations (24,063,138) (24,147,903)
Interest income 3,952,382 3,250,549
Interest expense (2,437,968) (16,474)
------------------- ------------------
Loss before income taxes (22,548,724) (20,913,828)
Income taxes 0 0
------------------- ------------------
Net Loss $(22,548,724) (20,913,828)
=================== ==================
Net loss per share (Note 5) $ (1.71) $ (1.60)
=================== ==================
Average number of shares and equivalents 13,194,579 13,076,807
=================== ==================
</TABLE>
See notes to condensed financial statements.
6
<PAGE>
BroadBand Technologies, Inc.
Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPT. 30,
1996 1995
-------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash used in operating activities $(19,413,989) $ (5,644,389)
INVESTING ACTIVITIES
Acquisitions of furniture, fixtures, and equipment (2,807,826) (7,166,445)
Disposal of furniture, fixtures, and equipment 0 451,261
-------------- --------------
Net cash used in investing activities (2,807,826) (6,715,184)
FINANCING ACTIVITIES
Issuance of common stock 969,222 331,379
Issuance of Warrants 0 7,000,000
Net proceeds from sale of Convertible Debt 111,212,267 0
Principal repayments on capital lease obligation (251,445) (268,362)
-------------- --------------
Net cash provided by financing activities 111,930,044 7,063,017
-------------- --------------
Increase/(decrease) in cash and cash equivalents 89,708,229 (5,296,556)
Cash and cash equivalents at beginning of period 65,350,943 80,289,960
-------------- --------------
Cash and cash equivalents at end of period $155,059,172 $74,993,404
============== ==============
</TABLE>
See notes to condensed financial statements.
7
<PAGE>
BroadBand Technologies, Inc.
Notes to Condensed Financial Statements
September 30, 1996
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three and nine months ended September 30, 1996 and 1995 are not
necessarily indicative of the results that may be expected for a full
fiscal year. For further information, refer to the financial statements and
accompanying footnotes for the year ended December 31, 1995 included in the
Company's Form 10-K submission.
2. RESTRICTED CASH
The Company has outstanding stand-by letters of credit in the amount of
$451,043. This letter of credit is collaterized by restricted cash of the
same amount.
3. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of
three months or less to be cash equivalents. Cash equivalents consists
principally of United States treasury securities and commercial paper.
INVESTMENTS IN DEBT SECURITIES
The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" (FAS
115), in 1994. There was no cumulative effect as a result of adopting FAS
115.
Management determines the appropriate classification of its investments in
debt securities at the time of purchase and reevaluates such determination
at each balance sheet date. Debt securities for which the Company has both
the intent and ability to hold to maturity are classified as held to
maturity. These securities are carried at amortized cost. At September 30,
1996, the Company had no investments that qualified as trading or available
for sale.
8
<PAGE>
BroadBand Technologies, Inc.
Notes to Condensed Financial Statements
3. INVESTMENTS IN DEBT SECURITIES (CONTINUED)
At September 30, 1996, the Company's investments in debt securities were
classified as cash and cash equivalents and short-term investments. The
Company maintains cash and cash equivalents and short-term investments
principally in United States treasury securities and commercial paper with
a maturity date less than twelve months with various financial
institutions. These financial institutions are located in different areas
of the U.S. and Company policy is designed to limit exposure to any one
institution. The Company performs periodic evaluations of the relative
standing of those financial institutions that participate in the Company's
investment strategy.
The following is a summary of cash and cash equivalents and short-term
investments by balance sheet classification for September 30, 1996 and
December 31, 1995:
SEPTEMBER 30, DECEMBER 31,
1996 1995
-------------------- ----------------
Cash and cash equivalents:
Demand deposit accounts $ 111,170,748 $ 17,544,401
Commercial paper 19,875,009 17,678,067
U.S. Treasury Obligations 1,504,880 12,026,297
-------------------- -----------------
$ 132,550,637 $ 47,248,765
==================== =================
Short-term investments:
Commercial paper $ 19,542,526 $ 5,425,895
U.S. Treasury Obligations 2,966,009 12,676,283
-------------------- -----------------
$ 22,508,535 $ 18,102,178
==================== =================
The estimated fair value of each investment approximates the amortized cost
and, therefore, there are no unrealized gains or losses as of September 30,
1996.
9
<PAGE>
BroadBand Technologies, Inc.
Notes to Condensed Financial Statements
4. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or
market. The components of inventory consists of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
----------------------- ---------------------
<S> <C> <C>
Electronic parts and other components $ 2,699,540 $ 2,629,801
Work In Process 469,207 479,914
Finished goods 1,438,425 816,538
----------------------- ---------------------
4,607,172 3,926,253
Inventory Reserve (3,522,919) (1,918,891)
----------------------- ---------------------
$ 1,084,253 $ 2,007,362
======================= ======================
</TABLE>
5. NET LOSS PER SHARE
The net loss per share is governed by APB 15. Under this guidance, options,
warrants, convertible debt and securities and other common stock
equivalents are considered as outstanding only if their effect is dilutive
(i.e. increasing the net loss per share).
6. WARRANTS
The Company received on April 28, 1995, $7 million for six-year Warrants
that entitles Holder of Warrant Certificates to purchase 1,000,000 shares
of the Company's Common Stock for $41.75 per share.
7. STOCK OPTIONS
The Company accounts for its employee stock option plans in accordance with
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25"). Under APB 25, no compensation expense has been
recognized since the exercise price of the Company's employee stock options
equals the market price of the underlying stock on the date of grant.
8. LONG TERM DEBT
The Company issued on May 17, 1996, $115 million of 5% Convertible
Subordinated Bonds Securities that entitles Holders of Bond Certificates to
convert into shares of the Company's Common Stock. Interest is payable on
May 15th and November 15th of each year, commencing on November 15, 1996.
Each $1,000 bond is convertible into 24.1080 shares of common stock of the
Company at a conversion price $41.48 per share. The bonds are not
redeemable by the Company prior to May 15, 1999. Thereafter, the Company
may redeem the bonds initially at 102%, and at decreasing prices thereafter
to 100% at maturity, in each case together with accrued interest. Costs
associated with this financing have been deferred and are being amortized
on a straight-line basis over the term of the debt.
10
<PAGE>
BroadBand Technologies, Inc.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RECENT PRODUCT AND OTHER DEVELOPMENTS
The Company's Second Generation product the FLX-2500 is a "global core"
broadband access platform. The FLX-2500 provides broadband video and data
interfaces and switching, as well as transport technology. When used in
conjunction with a Digital Loop Carrier system, for which interfaces have
been developed, it also provides telephony service. The FLX-2500 is modular
which enables network operators to deploy the FLX-2500 for telephony first
and have it ready, with the addition of plug-in modules and software, to
deliver broadband services.
The Company has begun shipments of the FLX-2500 to developers of peripheral
equipment, service developers and customers for the purpose of facilitating
integration and demonstration in their laboratories. In addition, the
Company has shipped the system to a customer's laboratory and another
customer's field site for testing its telephony capabilities. The system
has been shipped also to an international carrier for field demonstration
of its broadband video and data capabilities. As is customary with large
network operators, customer satisfaction at each step of the laboratory
testing, field trial, first office or service application stages are
conditions to the start of commercial deployment of the FLX-2500. Prior to
customer testing the FLX-2500 broadband service capabilities, the Company
is engaging in further development work on broadband video and data modules
that enable the use of longer and older drop cables in the customer's
installed base, as well as additional software features. The Company also
continues its efforts on developing product features, increased reliability
and lowering product cost to maintain its leadership position in switched
digital video technology and address emerging competition from other
suppliers of switched digital video products and technologies. In a recent
RFP decision, the Company believes an alternative supplier of switched
digital video has underbid the Company and expects price competition to be
an important competitive factor, together with other factors, including
experience, product performance, features, reliability and supplier
strength. Failure of the Company to meet its development goals could have a
material adverse effect on the Company. (See Item 5: Other Information).
NET SALES AND NET LOSS
Net sales for the third quarter ending September 30, 1996 were $5.7
million, compared to $7.1 million for the same period in 1995. Net sales
for the nine month period ended September 30, 1996 were $15.2 million,
compared to $15.7 million for the same period in 1995. Sales for the
quarter included the Company's First Generation platform and related
software plus some shipments of the telephony modules from the Company's
Second Generation product. Sales for the balance of 1996 are expected to
reflect a higher percentage of the Company's Second Generation product as
the revenue transition that began in the third quarter continues into the
first quarter of next year. The net loss for the third quarter was $8.5
million or $.64 per share, compared with $6.4 million or $.49 per share for
the same period in 1995. The net loss for the nine month period ended
September 30, 1996 was $22.5 million or $1.71 per share, compared with
$20.9 million or $1.60 per share for the same period in 1995. Net losses
include the Company's continued investment in research and development as
well as the impact of higher net interest expense.
11
<PAGE>
BroadBand Technologies, Inc.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
COST OF SALES
Cost of sales for the three month and nine month periods ended September
30, 1996 was $5.3 million and $14.8 million, respectively, compared to $7.2
million and $17.1 million for the same period in 1995. The gross margin
resulting from the cost of sales as a percentage of net sales for the three
month and nine month periods ended September 30, 1996 was a positive 6.9%
and 2.8% compared to a negative 1.4% and 8.8% for the same periods in 1995.
The improved gross margin for the period is a result of a change in product
mix compared to the prior year.
In a recent RFP decision, the Company believes an emerging supplier has
underbid the Company and expects price competition to be an important
competitive factor, together with other factors, including experience,
product performance, features, reliability and supplier strength.
Consequently, the Company expects that price competition could have an
adverse impact on the Company's margins. The Company's ability to continue
to meet its cost reduction goals could have a material effect on the
Company's profitability.
RESEARCH AND DEVELOPMENT EXPENSE
Research and development expenses for the three month and nine month
periods ended September 30, 1996 were approximately $6.2 million and $16.3
million compared to $4.5 million and $14.1 million for the same periods in
1995. The Company continues to invest in the development of the hardware
and software for its Second Generation platform and enhancements and
support for its First Generation platform.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the three month and nine
month periods ended September 30, 1996 were approximately $2.9 million and
$8.2 million compared to $2.9 million and $8.6 million for the same periods
in 1995. These expenses include support for field service, sales and
marketing resources as well as administrative requirements.
OTHER INCOME (EXPENSE)
Other income (expense) consists primarily of interest income and interest
expense. Net other income for the three month and nine month periods ended
September 30, 1996 was approximately $.2 million and $1.5 million compared
to $1.0 million and $3.2 million for the same periods in 1995. Interest
income is the result of investing activities of the cash balance available
during the period. The increase in interest income for the period ended
September 30, 1996 compared to the same period last year was the result of
a higher cash balance from the proceeds of the May 1996 bond offering. The
increase in interest expense for the period ended September 30, 1996
compared to the same period last year was the result of accrued interest
expense on the convertible bond offering.
12
<PAGE>
BroadBand Technologies, Inc.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
For the nine-month period ended September 30, 1996, Cash and Cash
Equivalents, which consists of investments in demand deposits, commercial
paper and U.S. Treasury obligations with maturities of less than 90 days
and short-term investments, which consists of commercial paper and U.S.
Treasury obligations with maturities of less than 360 days, increased
approximately $89.8 million. The ending balance is $155.1 million compared
to a balance of $65.3 million at December 31, 1995.
$.5 million of the total cash balance is restricted pursuant to
outstanding Letters of Credit.
Management expects that cash and cash equivalents at September 30, 1996 and
cash generated from the sale of the Company's products will be adequate to
fund operating requirements and property and equipment expenditures for at
least the next twelve (12) months based on current projections of
operations. However, management recognizes the dynamic nature of the
telecommunications industry and will consider financing alternatives when
and if market conditions are deemed to be available on favorable terms.
OTHER FINANCIAL INFORMATION
The Company's backlog includes sales orders received by the Company that
have a scheduled delivery date prior to September 30, 1997. The aggregate
sales price of orders received and included in backlog was approximately
$5.5 million at September 30, 1996. The Company believes that the orders
included in the backlog are firm orders that will be shipped prior to
September 30, 1997. However, some orders may be canceled by the customer
without penalty where management believes it is in the Company's best
interest to do so.
13
<PAGE>
BroadBand Technologies, Inc.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
RISK FACTORS
In connection with the "safe "harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this document are advised that this
document contains both statements of historical facts and forward looking
statements which include statements about the Company's Second Generation
Product and future financial requirements. Forward looking statements herein,
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those indicated by the forward looking statements. To
remain competitive, the Company must continue to invest substantial resources in
research and development and to achieve development results in its Second
Generation product and future products that meet the specific needs of
customers, including product performance, features, reliability and price
competitiveness. There can be no assurance the Company will be successful in
such efforts. Notwithstanding such investment, competitors may develop competing
technology and products that are more attractive to customers than are the
technologies and products of the Company and may offer such products at
materially lower prices.
Other risk factors include the possibility that telephone companies may not
widely deploy the Company's products in their local distribution networks. The
Company must complete the development of the new products that will be
integrated with Lucent Technologies' SLC(R)-2000 Access System and the joint
product must meet the industry standards established by Bell Communications
Research and must be compatible with the products of other telephone company
suppliers, including competitors of the Company. The provisions of the Company's
agreement with Lucent Technologies makes sales of the Company's new products in
the U.S. and Canada substantially dependent on the marketing efforts of Lucent
Technologies, which will continue to market alternative technology in
competition with the joint Lucent Technologies/BBT product. In recent years, the
purchasing behavior of the Company's large customers has increasingly been
characterized by the use of fewer, larger contracts. This trend is expected to
intensify, and contributes to the variability of the Company's results. Such
larger purchase contracts typically involve longer negotiating cycles, require
the dedication of substantial amounts of working capital and other Company
resources and in general, require investments which may substantially precede
recognition of associated revenues. Moreover, in return for larger, longer-term
purchase commitments, customers often demand more stringent acceptance criteria,
which can also cause revenue recognition delays. For example, customers have
requested that products be priced based on volume estimates of customers' future
requirements, but the failure of such customers to take delivery of product
comparable to volume anticipated, could result in negative margins on product
sales. Certain multi-year contracts may relate to new technologies which may not
have been previously deployed on a large-scale commercial basis. The Company may
incur significant initial cost overruns and losses on such contracts which would
be recognized in the quarter in which they became ascertainable. Future
estimates on such contracts are revised periodically over the lives of the
contracts, and such revisions can have a significant impact on reported earnings
in any one quarter.
14
<PAGE>
BroadBand Technologies, Inc.
ITEM 5. OTHER INFORMATION (CONTINUED)
RISK FACTORS (CONTINUED)
As the Company announces succeeding generations of its products to better meet
the changing requirements of customers, customers may delay orders of existing
products until the next generation product is available for shipment, or until
small volumes of next generation products are adequately field tested.
The Company competes against many larger companies that have significantly
greater resources than the Company. The Company, which has an accumulated
deficit of approximately $125 million as of September 30, 1996, has never been
profitable and may never achieve profitability. The Company may require
additional capital and may not be able to raise such capital or may be able to
raise such capital only on unfavorable terms. In May 1996, the Company sold $115
million of 5% convertible five-year notes. Failure to pay principal and interest
when due would have a material adverse effect on the Company.
Currently, the Company is dependent upon a single customer in North America,
which if lost would deprive the Company of substantially all its revenue. As the
Company's market is dominated by a few large potential customers, the Company
may not have sufficient bargaining power to sell its products on favorable
terms. If the Company is successful in expanding its sales, growth will place
significant strain on its operational resources and systems. In some cases, the
Company depends on single source suppliers or parts which are available only
from a limited number of sources. Delays in filling orders of the Company's
customers resulting from supplier delays may cause customer dissatisfaction. The
customers of the Company are subject to substantial government regulation which
could affect their ability to utilize the products of the Company. To remain
competitive, the Company must continue to invest substantial resources in
research and development. Notwithstanding such investment, competitors may
develop competing technology and products that are more attractive to customers
than is the technologies and products of the Company and may offer such products
at materially lower prices. The ability of the Company to compete effectively
depends upon its ability to attract and retain highly-skilled engineering,
manufacturing, marketing and managerial personnel. The patent and other
proprietary rights of the Company may not prevent the competitors of the Company
from developing non infringing technology and products that are more attractive
to customers than the technology and products of the Company. The technology and
products of the Company could be determined to infringe the patents or other
proprietary rights of others. The market price of the Company's securities has
been very volatile as a result of many factors, some of which are outside the
control of the Company, including, but not limited to, quarterly variations in
financial results, announcements by the Company, its competitors, customers,
potential customers or government agencies and predictions by industry analysts,
as well as general economic conditions. Sales by the Company's existing
stockholders, trading by short-sellers and other market factors may adversely
affect the market price of the Company's securities. Any or all these risks
could have a material adverse affect on the market price of the securities of
the Company. Continued pursuit of international markets exposes the Company to
increased risks of currency fluctuations and controls, political and social
risks, trade barriers, new competitors and other risks associated with
international markets.
15
<PAGE>
BroadBand Technologies, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this Report of Form 10-Q to be signed on its behalf by
the undersigned, thereunto duly authorized.
November 13, 1996 /S/ Timothy K. Oakley
----------------------------
Timothy K. Oakley
Vice President and
Chief Financial Officer
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 132,550,637
<SECURITIES> 22,508,535
<RECEIVABLES> 2,597,097
<ALLOWANCES> 0
<INVENTORY> 1,084,253
<CURRENT-ASSETS> 803,113
<PP&E> 26,635,458
<DEPRECIATION> (14,114,899)
<TOTAL-ASSETS> 175,727,683
<CURRENT-LIABILITIES> 23,438,903
<BONDS> 115,000,000
0
0
<COMMON> 132,429
<OTHER-SE> 37,288,780
<TOTAL-LIABILITY-AND-EQUITY> 175,727,683
<SALES> 15,217,611
<TOTAL-REVENUES> 15,217,611
<CGS> 14,792,755
<TOTAL-COSTS> 14,792,755
<OTHER-EXPENSES> 24,487,994
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,514,414)
<INCOME-PRETAX> (22,548,724)
<INCOME-TAX> 0
<INCOME-CONTINUING> (22,548,724)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,548,724)
<EPS-PRIMARY> (1.71)
<EPS-DILUTED> (1.71)
</TABLE>
