Revenue increased to $33.9M, up 2.6% year-over-year from $33M for a net profit of $909,000 or $0.04 per share up from a $3.2M loss

January 15, 2004

4 Min Read

FREMONT, Calif. -- (NYSE: NWK), a global provider of multiservice networking and service creation platforms, today reported results for the quarter ended December 26, 2003, the Company's fiscal third quarter, posting a profit of $0.04 per share.

Total revenue for the third quarter of fiscal 2004 increased 2.6 percent year over year to $33.9 million, from $33.0 million in the same quarter of the prior year. Third quarter total revenue also reflects a sequential increase of 6.0 percent from $31.9 million in the second quarter of fiscal 2004. Product revenue increased 1.6 percent year over year to $28.4 million, from $28.0 million in the third quarter of fiscal 2003. Product revenue increased 2.4 percent sequentially from $27.8 million in the second quarter of fiscal 2004.

Net profit for the third quarter of fiscal 2004 was $909,000, or $0.04 per share, compared to a net loss for the third quarter of fiscal 2003 of $3.2 million, or $0.14 per share. Net profit improved $0.02 per share over the second quarter of fiscal 2004 profit of $400,000, or $0.02 per share. A significant driver of third quarter profits was increased gross margin of 54.5 percent, as compared to 54.2 percent for the prior quarter and 43.1 percent for the third quarter of fiscal 2003.

Total revenue for the nine-month period ending December 26, 2003 was $99.9 million compared to $88.3 million for the same period last year, placing the Company in position to achieve its stated goal of 5-15% growth for fiscal year 2004. The Company reported a net profit of $2.9 million, or $0.13 per basic share, and $0.12 per diluted share, for the current nine-month period, compared to a net loss of $19.0 million, or $0.85 per share for the same period in fiscal 2003.

Hubert "Bert" Whyte, president and CEO, noted, "We enter the new year feeling good about the progress that we have made, and more optimistic about the state of the telecommunications industry. During this past year, our customers appreciated our commitment to our flagship Promina product line as we have continually upgraded and expanded its functionality. Our strategy to provide investment protection to our existing customers was further enhanced this past year with the addition of the SCREAMlink program that allows our customers to gracefully migrate to broadband. And, we are pleased with our progress in positioning SCREAM to address emerging bundled and tiered services just as broadband acceptance and DSL line growth reach record levels."

Highlights from the current quarter included the following:

  • A $4.5 million order from the US Army KICC (Kuwait-Iraq Command, Control, Communications and Computers Commercialization) project. Part of the $87 billion supplemental budget signed recently by President Bush, this first phase of the order includes Promina 400 and Promina 800 platforms that provide secure voice, video, data and IP communications to support more than 100,000 US and coalition troops now in the region. It is planned that this network will also provide the initial backbone for Iraq's new communications infrastructure.

  • Installed a new SHOUTIP network for a large Palo Alto, California law firm that connects to an existing Siemens PBX network to deliver IP over frame relay, leveraging SHOUTIP's BESTflow architecture. The SHOUTIP network will enable the law firm to preserve its investment in its existing PBX equipment.'s SHOUTIP platforms recently received HiPath certification by Siemens ICN.

  • Deployment of the SCREAM Service Creation Manager platform in BT's "Broadband Hotbed" testing lab for the development of new broadband services and applications, as announced separately today.

  • Tested secure SHOUTIP for interoperability by JITC, the Joint Interoperability Test Command for the Defense Information Systems Agency (DISA), for secure voice over Internet protocol, especially as it applies to satellite communications. JITC is the accrediting authority through which all equipment must pass before it is put into the network.

  • Awarded contract and began deployment of the Bandwidth Management Equipment (BME) for the NATO communications network, with Promina, SCREAMlink and SCREAM gear for ISDN voice, routing, and data transport capabilities over a variety of transport protocols.

Network Equipment Technologies Inc. (

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