SAN JOSE, California -- August 15, 1996 -- Cisco Systems, Inc., (Nasdaq: CSCO), the leading global supplier of internetworking solutions, today reported its fourth quarter and annual results for the period ending July 28, 1996. Actual reported financial results include StrataCom., Inc. and associated StrataCom merger costs of $15.5 million.
Net consolidated sales for the fourth quarter were $1,292.1 million, compared to $701.2 million for the same period last year, an increase of 84%. Net consolidated income was $276.6 million, or $.41 per share, versus $155.3 million or $.24 per share during the fourth quarter last year, increases of 78% and 71% respectively.
Net consolidated sales for the 1996 fiscal year were $4,096.0 million, compared to $2,232.7 million for the 1995 fiscal year, an increase of 83%. Net consolidated income was $913.3 million, or $1.37 per share, versus $456.5 million or $.72 per share for fiscal year 1995, increases of 100% and 90% respectively.
Pro forma Cisco financial results, excluding StrataCom, Inc. and associated merger costs were: pro forma fourth quarter net sales were $1,176.4 million, compared to $621.2 million for the same period last year, an increase of 89%. Pro forma net income was $266.9 million, or $.45 per share, versus $143.7 million, or $.26 per share during the fourth quarter of last year, increases of 86% and 73% respectively.
Pro forma net sales for the 1996 fiscal year were $3,698.2 million, compared to $1,978.9 million for the 1995 fiscal year, an increase of 87%. Pro forma net income was $861.6 million, or $1.47 per share, versus $421.0 million, or $.76 per share for fiscal year 1995, increases of 105% and 93% respectively.
The fiscal 1995 consolidated and pro forma results include a one-time pre-tax charge of $95.8 million, or $.11 per share on a post-tax, pro forma basis incurred by the company upon the acquisition of the net assets of LightStream Corporation in the second quarter.
The net income per share and number of shares used in per share calculations for all periods presented reflect the two-for-one stock split which was effective February 16, 1996.
On July 31, 1996, Cisco's Board of Directors approved an increase to the stock repurchase program authorizing an additional 10.0 million shares of Cisco common stock to be used to meet several of the Company's common stock requirements, primarily its employee stock plans. When added to the remaining shares authorized under the initial repurchase program approved by the Board in August 1994, Cisco is now authorized to repurchase up to 16.8 million shares of Cisco common stock.
"We are pleased to report a solid financial performance for Cisco's fourth fiscal quarter of 1996," said John Chambers, president and CEO of Cisco Systems.
"The strength of the quarter was due to several factors, including Cisco's ability to deliver leadership products across the key internetworking market sectors -- an accomplishment enabled in large part by our business unit structure put in place 15 months ago. Our unique position makes Cisco the beneficiary of growth in both the enterprise market and the Internet," said Chambers.
Throughout the quarter, Cisco continued to extend its reach through an array of internal product developments, strategic alliances, minority investments, and acquisitions. During this quarter, Cisco closed the acquisition of StrataCom and announced its intent to purchase Telebit Corporation's high-density digital modem technologies for dial access.
The addition of the LightStream 1010 Asynchronous Transfer Mode (ATM) campus switch, the AS5200 dial platforms and StrataCom's wide area network (WAN) switching products to Cisco's portfolio establishes the Company as the only vendor to offer end-to-end, best-in-class internetworking solutions.
"Some of our leading-edge customers are beginning to see the Strategic advantages of aligning with a single networking vendor and its partners for a large portion of their network requirements. Choosing Cisco provides the benefits of one vendor with world-class service and support, leadership in numerous key market areas, global presence and Cisco IOS(TM) software as the consistent fabric of the network," said Chambers.
"I'd like to thank our customers, employees and partners for an outstanding performance in the quarter and in fiscal 1996," he concluded.
Cisco Systems (NASDAQ: CSCO) is the leading globalsupplier of
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This release may consist of forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Cisco with the S.E.C., specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.
Cisco IOS and Cisco Systems are trademarks, and Cisco and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. All other trademarks, service marks, registered trademarks or registered service marks mentioned in this document are the property of their respective owners.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
| July 28, 1996 | July 30, 1995 | ||||
| Pro Forma Cisco (1) |
Consolidated (2) | Pro Forma Cisco |
Consolidated | ||
| Assets | |||||
| Current Assets: | |||||
| Cash and equivalents | $ 166,677 | $ 279,695 | $ 204,846 | $ 284,388 | |
| Short-term investments | 702,049 | 758,489 | 234,681 | 279,754 | |
| Accounts receivable, net | 555,149 | 622,859 | 384,242 | 421,747 | |
| Inventories | 289,695 | 301,188 | 71,160 | 81,805 | |
| Deferred income taxes | 86,535 | 101,827 | 75,297 | 88,038 | |
| Other current assets | 86,437 | 95,582 | 25,743 | 28,428 | |
| Total current assets | 1,886,542 | 2,159,640 | 995,969 | 1,184,160 | |
| Investments | 801,809 | 832,114 | 403,855 | 410,798 | |
| Restricted investments | 228,644 | 228,644 | 173,073 | 173,073 | |
| Property and equipment, net | 278,948 | 331,315 | 136,635 | 172,561 | |
| Other assets | 67,469 | 78,519 | 47,747 | 51,357 | |
| Total assets | $3,263,412 | $ 3,630,232 | $1,757,279 | $1,991,949 | |
| Current Liabilities: | |||||
| Accounts payable and other accrued expenses | $ 524,301 |
$ 599,459 |
$ 266,173 |
$ 316,911 |
|
| Income taxes payable | 153,161 | 169,894 | 71,583 | 71,970 | |
| Total current liabilities | 677,462 | 769,353 | 337,756 | 388,881 | |
| Minority interest | 41,257 | 41,257 | 40,792 | 40,792 | |
| Shareholders' equity | 2,544,693 | 2,819,622 | 1,378,731 | 1,562,276 | |
| Total liabilities and shareholders equity | $3,263,412 | $ 3,630,232 | $1,757,279 | $1,991,949 | |
(1) Excludes StrataCom, Inc. and related merger costs of $13.5M
(2) Includes StrataCom results as of June 30, 1996 and related merger costs of $15.5M,$2.0M of which have previously been recorded by StrataCom.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per-share amounts)
| Quarters Ended | Years Ended | ||||
| July 28, 1996 | July 30, 1995 | July 28, 1996 | July 30, 1995 | ||
| (unaudited) | |||||
| Net Sales | $1,292,150 | $ 701,213 | $ 4,096,007 | $2,232,652 | |
| Cost of sales | 452,651 | 233,165 | 1,409,862 | 742,860 | |
| Gross Margin | 839,499 | 468,048 | 2,686,145 | 1,489,792 | |
| Operating expenses: | |||||
| Research and development | 124,184 | 66,858 | 399,291 | 210,815 | |
| Sales and marketing | 229,550 | 132,997 | 726,278 | 399,983 | |
| General and administrative | 46,393 | 27,575 | 144,270 | 85,271 | |
| Merger related costs | 15,500 | - | 15,500 | - | |
| Purchased R&D | - | - | - | 95,760 | |
| Total operating expenses | 415,627 | 227,430 | 1,285,339 | 791,829 | |
| Operating Income | 423,872 | 240,618 | 1,400,806 | 697,963 | |
| Interest and other income, net | 18,843 | 11,122 | 64,019 | 40,014 | |
| Income before provision for taxes | 442,715 | 251,740 | 1,464,825 | 737,977 | |
| Provision for taxes | 166,164 | 96,416 | 551,501 | 281,488 | |
| Net income | $ 276,551 | $ 155,324 | $ 913,324 | $ 456,489 | |
| Net income per share | $ 0.41 | $ 0.24 | $ 1.37 | $ 0.72 | |
| Shares used in per- share calculation | 676,138 | 641,630 | 666,586 | 630,711 | |
PRO FORMA STATEMENT OF OPERATIONS
Excluding Stratacom, Inc. and Related Merger Costs
(In thousands, except per-share amounts)
| Quarters Ended | Years Ended | ||||
| July 28, 1996 | July 30, 1995 | July 28, 1996 | July 30, 1995 | ||
| (unaudited) | |||||
| Net Sales | $1,176,390 | $ 621,184 | $3,698,210 | $1,978,916 | |
| Cost of sales | 410,659 | 202,457 | 1,261,441 | 644,152 | |
| Gross Margin | 765,731 | 418,727 | 2,436,769 | 1,334,764 | |
| Operating expenses: | |||||
| Research and development | 104,491 | 52,661 | 329,895 | 164,819 | |
| Sales and marketing | 208,446 | 119,078 | 654,169 | 354,722 | |
| General and administrative | 42,989 | 24,912 | 132,437 | 76,524 | |
| Purchased R&D | - | - | - | 95,760 | |
| Total operating expenses | 355,926 | 196,651 | 1,116,501 | 691,825 | |
| Operating Income | 409,805 | 222,076 | 1,320,268 | 642,939 | |
| Interest and other income, net | 17,178 | 9,736 | 58,358 | 36,107 | |
| Income before provision for taxes | 426,983 | 231,812 | 1,378,626 | 679,046 | |
| Provision for income taxes | 160,119 | 88,089 | 516,985 | 258,038 | |
| Net income | $ 266,864 | $ 143,723 | $ 861,641 | $ 421,008 | |
| Net income per-share | $ 0.45 | $ 0.26 | $ 1.47 | $ 0.76 | |
| Shares used in per-share calculation | 593,747 | 562,238 | 585,408 | 554,596 | |
CONSOLIDATED INCOME STATEMENT BY QUARTER - CISCO AND STRATACOM
FYE July 28,1996
(In thousands, except per-share amounts)
| Quarters Ended | |||||
| Oct 29, 1995 | Jan. 28, 1996 | April 28, 1996 | July 28, 1996 | ||
| (unaudited) | |||||
| Net Sales | $ 798,291 | $ 918,510 | $ 1,087,056 | $ 1,292,150 | |
| Cost of sales | 267,742 | 312,315 | 377,154 | 452,651 | |
| Gross Margin | 530,549 | 606,195 | 709,902 | 839,499 | |
| Operating expenses: | |||||
| Research and development | 78,180 | 89,695 | 107,232 | 124,184 | |
| Sales and marketing | 145,251 | 163,527 | 187,950 | 229,550 | |
| General and administrative | 28,267 | 31,462 | 38,148 | 46,393 | |
| Merger related costs | - | - | - | 15,500 | |
| Total operating expenses | 251,698 | 284,684 | 333,330 | 415,627 | |
| Operating Income | 278,851 | 321,511 | 376,572 | 423,872 | |
| Interest and other income, net | 12,858 | 15,646 | 16,672 | 18,843 | |
| Income before provision for taxes | 291,709 | 337,157 | 393,244 | 442,715 | |
| Provision for taxes | 110,322 | 127,420 | 147,595 | 166,164 | |
| Net income | $ 181,387 | $ 209,737 | $ 245,649 | $ 276,551 | |
| Net income per-share | $ 0.28 | $ 0.31 | $ 0.37 | $ 0.41 | |
| Shares used in per-share calculation | 652,174 | 666,177 | 669,960 | 676,138 | |
CONSOLIDATED INCOME STATEMENT BY QUARTER - CISCO AND STRATACOM
FYE July 30,1995
(In thousands, except per-share amounts)
| Quarters Ended | |||||||||||
| Oct 30, 1994 | Jan. 29, 1995 | April 30, 1995 | July 30, 1995 | ||||||||
| (unaudited) | |||||||||||
| Net Sales | $ 433,959 | $ 515,983 | $ 581,497 | $ 701,213 | |||||||
| Cost of sales | 144,244 | 172,470 | 192,981 | 233,165 | |||||||
| Gross Margin | 289,715 | 343,513 | 388,516 | 468,048 | |||||||
| Operating expenses: | |||||||||||
| Research and development | 37,271 | 50,400 | 56,286 | 66,858 | |||||||
| Sales and marketing | 76,543 | 88,333 | 102,110 | 132,997 | |||||||
| General and administrative | 16,511 | 18,130 | 23,055 | 27,575 | |||||||
| Purchased R&D | - | 95,760 | |||||||||
| Total operating expenses | 130,325 | 252,623 | 181,451 | 227,430 | |||||||
| Operating Income | 159,390 | 90,890 | 207,065 | 240,618 | |||||||
| Interest and other income, net | 7,899 | 8,971 | 12,022 | 11,122 | |||||||
| Income before provision for taxes | 167,289 | 99,861 | 219,087 | 251,740 | |||||||
| Provision for taxes | 63,438 | 37,721 | 83,913 | 96,416 | |||||||
| Net income | $ 103,851 | $ 62,140 | $ 135,174 | $ 155,324 | |||||||
| Net income per-share | $ 0.17 | $ 0.10 | $ 0.21 | $ 0.24 | |||||||
| Shares used in per-share calculation | 608,591 | 634,153 | 636,634 | 641,630 | |||||||
