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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): February 13, 1998
TranSwitch Corporation
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(Exact name of Registrant as specified in its charter)
Three Enterprise Drive, Shelton, Connecticut
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(Address of principal executive offices)
06484
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(Zip Code)
(203) 929-8810
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Registrant's telephone number, including area code
Delaware 0-25996 06-1236189
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(State or other jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
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ITEM 5. Other Events.
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On February 4, 1998, the Company issued a press release, a copy of which is
attached as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 7. Financial Statements and Exhibits.
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Exhibit No. Exhibit
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99.1 Press Release of the Company dated February 4, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSWITCH CORPORATION
February 13, 1998 By /s/ Michael F. Stauff
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Michael F. Stauff
Chief Financial
Officer
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Exhibit Index
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Exhibit No. Description Page No.
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99.1 Press Release of the Company dated February 4, 1998. 5
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EXHIBIT 99.1
TRANSWITCH CORPORATION REPORTS RECORD
REVENUES AND PROFITABLE FOURTH QUARTER
SHELTON, Conn--Feb. 4, 1998--TranSwitch Corporation (NASDAQ:TXCC) announced
today the financial results for its fourth quarter and the fiscal year which
ended December 31, 1997.
Total revenues for the fourth quarter of 1997 were $8,334,000, an increase
of 99% above the revenue of $4,190,000 reported for the same period in 1996. In
addition, the Company reported net income of $433,000, or $.03 per share, for
the fourth quarter of 1997. Total revenues for the year ended December 31, 1997,
were $27,084,000, an increase of 38% over the $19,650,000 reported for 1996. The
Company reported a net loss of ($1,873,000), or ($.15) per share, for the year
ended December 31, 1997, compared to a net loss of ($10,077,000), or ($.86) per
share, for the year ended December 31, 1996.
"We are very pleased with our fourth quarter results and our overall
performance in 1997. We have had good growth in all three of our targeted end-
markets, namely worldwide public network infrastructure, Internet
infrastructure, and corporate wide area network. In addition, we are excited
about our design-win momentum, both in quality and quantity. For instance, we
have had significant design-wins in 1997 in Bay Networks, Cisco, and Ericsson,"
commented Dr. Santanu Das, president and chief executive officer of TranSwitch
Corporation. "Our bookings were strong throughout the year, and we had operating
profits in Q3 and Q4. As a result of strong revenue growth and attention to
product cost and expense control during the year, both gross margins and
operating margins for the year improved. Our year-end '97 cash grew to
$21,618,000 because of strong cash management and a financing through a private
placement for $14,500,000," continued Dr. Das.
"Our strategy in 1997 was to grow our revenue significantly, while holding
our expenses in R&D and G&A at about the same level as in 1996. We believe this
strategy has paid off, and our intention is to continue a similar strategy in
1998," commented Dr. Das. "Our target end-markets are growing at a significant
rate and we believe we are very well-positioned to benefit from this growth, as
we now have a well-balanced product portfolio and a number of super products in
the pipeline," continued Dr. Das.
"In summary, we feel 1997 was a good year from the bookings and revenue
point of view. Our balance sheet today is stronger than ever. We also have good
design-win momentum and strong customer alliances in place. As a result, we look
forward to 1998 and beyond with positive anticipation," concluded Dr. Das.
Forward-looking statements in this release, including without limitation,
statements made in the three final paragraphs of this news release, are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that all forward-looking statements
involve risks and uncertainties, including without limitation risks of
dependence on third-party VLSI fabrication facilities, intellectual
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property rights and litigation, risks in technology development and
commercialization, risks in product development and market acceptance of and
demand for the Company's products, risks of downturns in economic conditions
generally, and in the telecommunications and data communications markets and the
semiconductor industry specifically, risks associated with competition and
competitive pricing pressures, risks associated with foreign sales and high
customer concentration and other risks detailed in the Company's filings with
the Securities and Exchange Commission.
Headquartered in Shelton, Connecticut, TranSwitch Corporation specializes
in the design, development and marketing of highly integrated digital and mixed-
signal semiconductor solutions for the telecommunications and data
communications markets. The Company has sold its telecommunications and data
communications VLSI devices to more than 300 customers worldwide. Our targeted
end-markets include worldwide public network infrastructure, Internet
infrastructure, and corporate wide area network (WAN), as well as government,
university and private laboratories. Detailed information on TranSwitch
products, news announcements, seminars, service and support is available on
TranSwitch's home page at the World Wide Web site -http://www.transwitch.com.
TRANSWITCH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DEC. 31, Dec. 31,
(in thousands, -------------------------- -------------------------
except per share data) 1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Total Revenues $ 8,334 $ 4,190 $ 27,084 $ 19,650
Total cost of revenues 3,249 6,094 11,254 13,806
Gross Profit 5,085 (1,904) 15,830 5,844
Operating expenses:
Research and development 2,353 2,594 9,194 8,928
Marketing and sales 1,888 1,548 6,858 5,454
General and administrative 680 809 2,288 2,229
Total operating expenses 4,921 4,951 18,340 16,611
Operating income (loss) 164 (6,855) (2,510) (10,767)
Interest income, net 269 104 637 690
Net income (loss) $ 433 ($6,751) ($1,873) ($10,077)
Basic earnings per share $0.04 ($0.57) ($0.15) ($0.86)
Diluted earnings per share $0.03 ($0.57) ($0.15) ($0.86)
Basic average shares outstanding 12,300 11,887 12,152 11,751
Diluted average shares outstanding 14,388 11,887 12,152 11,751
</TABLE>
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CONSOLIDATED BALANCE SHEETS
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<CAPTION>
Dec. 31, 1997 Dec. 31, 1996
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<S> <C> <C>
Assets
Cash and short term investments $21,618 $12,688
Accounts receivable, net 4,528 2,893
Inventory, net 4,812 3,524
Other current assets 815 305
Total current assets 31,773 19,410
Property and equipment, net 3,816 2,647
Product licenses 1,000 1,254
Total assets $36,589 $23,311
Liabilities and Stockholders' equity
Accounts payable $ 1,350 $ 1,805
Other accrued liabilities 4,822 2,955
Total current liabilities 6,172 4,760
Product licenses, less current portion 331 1,252
Total stockholders' equity 30,086 17,299
Total liabilities & stockholders' equity $36,589 $23,311
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CONTACT:
TranSwitch Corporation
Michael F. Stauff, Chief Financial Officer
Phone: 203/929-8810
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