SAN JOSE, California -November 5, 1996 - Cisco Systems, Inc., the leading global supplier of internetworking solutions, today reported its first quarter results for the period ending October 26, 1996.
Net sales for the first quarter were $1,434.8 million, compared with $798.3 million for the same period last year, an increase of 80%. Net income was $180.9 million or $0.26 per share, compared with $181.4 million or $0.28 per share for the first quarter of 1996.
On October 24, 1996 Cisco completed its purchase of Telebit Corporation and its Modem ISDN Channel Aggregation (MICA*) technologies and took a one-time charge of $174.6 million or $0.26 per share on an after-tax basis as a writeoff of in-process R&D. Additionally, the Company realized a pretax gain of $55.1 million from the sale of a portion of one minority stock investment that contributed $0.05 per share on an after-tax basis to net income for the quarter.
Proformanet income, excluding the writeoff of Telebit in-process R&D and the gain from the sale of the above-mentioned stock was $320.8 million or $0.47 per share, compared with $181.4 million or $0.28 per share in the same period last year, increases of 77% and 68% respectively.
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 that was effective February 16, 1996."We are pleased to report the tenth consecutive quarter of double-digit revenue growth for Cisco," said John Chambers, president and CEO of Cisco Systems.
This quarter Cisco continued to move forward in its three key markets; Enterprise, Service Provider and Small-to-Medium Business, by providing end-to-end solutions through a broad range of internal product developments, strategic alliances, minority investments and acquisitions.
In the enterprise, a number of leading-edge customers are beginning to align with Cisco as a strategic partner for a large portion of their network requirements. Cisco broadened its enterprise switching leadership with the acquisition of Granite Systems for Gigabit Ethernet switching technologies and Nashoba Networks for Token Ring switching technologies.
During the quarter, Cisco reinforced its commitment to the enterprise dial market with the announcement of an additional set of dial solutions and, as mentioned, closed its acquisition of Telebit's MICA technologies for dial access solutions.
The strategic nature of networking continues to drive customers' needs for comprehensive network management. Cisco also announced its intent to acquire NETSYS Technologies, a leading supplier of network modeling software.
Cisco has also introduced a number of products focused on scaling and securing the Internet and business solutions aimed at making it easier for service providers to do business with Cisco.
"The increasing demand for rapid time to market is prompting leading service providers to seek complete solutions, such as a fully integrated Point of Presence (POP), from a strategic partner. As the architects of the Internet, it is our intent to help our customers scale, secure and grow the Internet," concluded Chambers.
Cisco Systems (NASDAQ: CSCO) is the leading globalsupplier ofinternetworkingsolutions for corporate intranets and the global Internet.Cisco's products, including routers, LAN and ATM switches, dial-up accessservers and network management software, are integrated by the Cisco IOSsoftware to link geographically dispersed LANs, WANs and IBM networks.Company news and product/service information are available at World WideWeb site http://www.cisco.com.Cisco is headquartered in San Jose, California.
Condensed Consolidated Balance Sheets
(In thousands)| October 26, 1996 |
July 28, 1996 |
|
| Assets | ||
| Current Assets: | ||
| Cash and Equivalents | $ 553,825 | $ 279,695 |
| Short-Term Investments | $ 723,420 | $ 758,489 |
| Accounts Receivable, net | $ 752,643 | $ 622,859 |
| Inventories, net | $ 243,538 | $ 301,188 |
| Deferred Income Taxes | $148,597 | $101,827 |
| Other Current Assets | $ 92,730 | $ 95,582 |
| Total Current Assets | $ 2,514,753 | $ 2,159,640 |
| Investments | $ 1,083,318 | $ 832,114 |
| Restricted Investments | $ 238,406 | $ 228,644 |
| Property and Equipment, net | $ 379,388 | $ 331,315 |
| Other Assets | $ 86,567 | $ 78,519 |
| Total Assets | $ 4,302,432 | $ 3,630,232 |
| Liabilities and Shareholder' Equity: | ||
| Current Liabilities: | ||
| Accounts Payable and Other Accrued Expenses | $ 852,356 | $ 599,459 |
| Income Taxes Payable | $ 323,683 | $ 169,894 |
| Total Current Liabilities | $ 1,176,039 | $ 769,353 |
| Minority Interest | $ 41,176 | $ 41,257 |
| Shareholders' Equity | $ 3,085,217 | $ 2,819,622 |
| Total Liabilities and Shareholders Equity | $ 4,302,432 | $ 3,630,232 |
Condensed Consolidated Statement of Operations
| QuarterEnded October 26, 1996 |
Quarter Ended October 29, 1995 |
|
| Net Sales | $ 1, 434, 826 | $ 798, 291 |
| Cost of Sales | $ 501, 480 | $ 267, 742 |
| Gross Margin | $ 933, 346 | $ 530, 549 |
| Operating Expenses | ||
| Research and Development | $ 144, 711 | $78, 180 |
| Sales and Marketing | $ 259, 110 | $ 145, 251 |
| General and Adminstrative | $ 41, 776 | $ 28, 267 |
| Purchased R&D | $ 174, 589 | $ -- |
| Total Operating Expenses | $ 620, 186 | $ 251, 698 |
| Operating Income | $ 313, 160 | $ 278, 851 |
| Realized Gain on the Sale of Investment | $ 55, 108 | $ -- |
| Interest and Other Income, net | $ 21, 478 | $ 12, 858 |
| Income Before Provision for Income Taxes | $ 389, 746 | $ 291, 709 |
| Provision for Income Taxes | $ 208, 804 | $ 110, 322 |
| Net Income | $ 180, 942 | $ 181, 387 |
| Net Income per Share | $ .26 | $ .28 |
| Number of Shares Used in Per-Share Calculation | $ 682, 918 | $ 652, 174 |
Pro Forma Statement of Operations Excluding
Purchased R&D and Realized Gain
In thousands, except for per-share amounts
| QuarterEnded October 26, 1996 |
Quarter Ended October 29, 1995 |
|
| Net Sales | $ 1, 434, 826 | $ 798, 291 |
| Cost of Sales | $ 501, 480 | $ 267, 742 |
| Gross Margin | $ 933, 346 | $ 530, 549 |
| Operating Expenses | ||
| Reaserch and Develpment | $ 144, 711 | $ 78, 180 |
| Sales and Marketing | $ 259, 110 | $ 145, 251 |
| General and Adminstrative | $ 41, 776 | $ 28, 267 |
| Total Operating Expenses | $ 445, 597 | $ 251, 698 |
| Operating Income | $ 487, 749 | $ 278, 851 |
| Interest and Other Income, net | $ 21, 478 | $ 12, 858 |
| Income Before Provision for Income Taxes | $ 509, 227 | $ 291, 709 |
| Net Income | $ 320, 813 | $ 181, 387 |
| Net Income per Share | $ .47 | $ .28 |
| Number of Shares Used in Per Share Calculation | $ 682, 918 | $ 652, 174 |
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 reportson 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.
Copyright 1996 ) Cisco Systems Inc. All rights reserved.
