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Redback Hits the Numbers, Profits

Craig Matsumoto
1/26/2006

Redback's comeback story may now be complete, as the company today reported what was once a novel concept for the company: earnings.

The company reported net income of only one penny per share, but that's a big penny for Redback, which has never been profitable in its history. Redback staged an IPO in 1999, and then went through a bankruptcy reorganization in 2003.

"Let me apologize in advance if today I were to stumble over words like 'gain,' 'earnings,' and 'income' -- these are words that I'm not used to saying in a Redback earnings release, but they are words I'll have to get used to," CFO Thomas Cronan said on the conference call.

For its fourth quarter, which ended Dec. 31, Redback reported net income of roughly $300,000, or 1 cent per share, on revenues of $48 million, compared with the previous quarter's losses of $8.4 million, or 15 cents per share, on revenues of $36.4 million.

Investors got a scare at first when Redback had to delay its earnings release by nearly an hour -- the result, officials later said, of "logistical issues" in getting the press release onto the news wire. But in the end, Redback reported its "strongest overall quarterly performance in five years," according to CEO Kevin DeNuccio.

Redback seems to find a way to make things interesting. Tonight, it was the delay in the conference call. Last September, the quarterly earnings weren't all that spectacular, but company executives managed to spin it positively by saying revenue shortfalls were due to delays in recognizing revenue and that one day it would realize its strong backlog. That led to an uptick in the stock. (See Wild Ride for Redback Shares.) For its fourth quarter a year ago, Redback reported losses of $12 million, or 23 cents per share, on revenues of $32.1 million.

Redback's non-GAAP profits of roughly $400,000, or 1 cent per share, were in line with analysts' expectations, according to Thomson Reuters , and its revenues outpaced the $42.7 million analysts were expecting. And executives gave investors more bullish news to dig into, saying that the backlog continues to be strong and that its SmartEdge product has "momentum."

Redback's SmartEdge routers led the way, with shipments more than doubling for the second year in a row -- starting from a small base, admittedly. SmartEdge "has now achieved the base and momentum to be the overall driver of the company's performance," DeNuccio said on the conference call.

As the numbers came out, Redback rallied sharply after hours, climbing $1.98 (13.54%) to $16.60.

— Craig Matsumoto, Senior Editor, Light Reading

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paolo.franzoi
paolo.franzoi
12/5/2012 | 4:08:03 AM
re: Redback Hits the Numbers, Profits

Not much as they were washed out in the bankruptcy.

seven
Pete Baldwin
Pete Baldwin
12/5/2012 | 4:08:03 AM
re: Redback Hits the Numbers, Profits
One clarification -- Redback's own SEC documents say the company has "never been profitable," and it's certainly never had a profitable year.

But there was one profitable quarter -- Q4 of '99, with GAAP net income of $1.2M (2 cents) on $26M revenues.

To relive those days past:
http://www.redback.com/news/pr...

Kudos to Redback for getting in the black again. Wonder what that means to the folks who invested in 1999 and held on too long ...
lightreceding
lightreceding
12/5/2012 | 4:07:44 AM
re: Redback Hits the Numbers, Profits
SmartEdge "has now achieved the base and momentum to be the overall driver of the company's performance," DeNuccio said on the conference call.

So they are finally selling some are they? After 5 years since the acqusition it is about time that they turned it in to something sellable. Especially considering that the SMS was obsolete when it was released. I guess it has been long enough that people have moved on and customers are ready to reconsider Redback.
Pete Baldwin
Pete Baldwin
12/5/2012 | 4:01:21 AM
re: Redback Hits the Numbers, Profits
D'oh!!! After celebrating profitability, Redback's had to delay its 10-K filing.

Redback says it "requires additional time in order to record an adjustment to correct stock compensation expense" and to (very loosely paraphrasing here) double-check Sarbanes-Oxley stuff.

That's from an SEC form 12(b)-25 filed yesterday.

CIBC analyst Steve Kamman says it's just a technicality, nothing to worry about. Good humor value, though.
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