GlobeSpan Announces Record Third Quarter Revenues - Company Financial Information

Cambridge Telcom Report, Nov 1, 1999

GlobeSpan, Inc., a leading worldwide developer of advanced digital subscriber line (DSL) chipsets, Monday announced its results for the third quarter and nine months ended September 30, 1999.

GlobeSpan reported net revenues of $17,032,000, an increase of 119% over revenues of $7,765,000 for the third quarter of 1998. Net loss for the quarter was $258,000 or $0.01 basic loss per common share. Net loss for the 1998 third quarter was $1,728,000 or $0.15 basic loss per share.

For the nine months ended September 30, 1999, GlobeSpan reported net revenues of $35,107,000, an increase of 53% over $23,016,000 reported for the same period last year. Net loss was $9,957,000 or $0.68 basic loss per common share attributable to common shareholders, including a one-time preferred stock deemed dividend and accretion of $3,466,000 or $0.24 basic loss per share, compared to a loss of $2,390,000 or $0.20 basic loss per common share in the 1998 period.

"We are beginning to see past design wins translate into revenues, stated Armando Geday, president and CEO. Our accelerated growth resulted from adding 18 new customers over the second quarter count and our expanding the number of products we supplied Cisco, our largest customer. We realized impressive growth in all our products: HDSL, SDSL, and both CAP and DMT ADSL. Our focus on performance and programmability has enabled our customers to minimize their time to market and maximize return on R&D investment by addressing multiple markets with single design platforms. As a result, we have significantly increased the number of revenue-producing customers in the third quarter of 1999. We are now shipping products for both symmetric and asymmetric segments of the DSL markets (HDSL, HDSL2, SDSL and ADSL) using 2B1Q, PAM, CAP and DMT line codes."

Bob McMullan, chief financial officer, added, "We have reached a new revenue base which we believe we will continue to grow next quarter and into 2000."

GlobeSpan, Inc. is a leading worldwide developer of advanced DSL chipsets, which enable data transmission over the existing network of copper telephone wires, known as the local loop, at rates over 100 times faster than today's commonly deployed 56K modems. GlobeSpan has leveraged six years of field experience in implementing DSL technology to successfully bring proven DSL chipset solutions to market. The company's core engineering team includes several individuals who were early developers of DSL technology at AT&T Bell Labs in 1988.

GlobeSpan offers a broad suite of DSL solutions, including HDSL, HDSL2, SDSL and ADSL chipsets. To date, the company has shipped more than one million DSL chipsets, representing a significant share of this emerging market, to a customer base of more than 100 DSL equipment manufacturers. GlobeSpan, Inc. is based at 100 Schulz Drive, Red Bank, New Jersey 07701 and can be reached by phone at 1-732-345-7500. The company's web site is www.globespan.net.

GLOBESPAN, INC.
Statements of Operations - Unaudited
(in thousands, except per share data)

                           For three months       For nine months
                          Ended September 30,   Ended September 30,
                        --------------------  --------------------
                             1999       1998       1999       1998
                        --------------------  --------------------

Net revenues            $  17,032  $   7,765  $  35,107  $  23,016
                        --------------------  --------------------

   Cost of sales            6,584      2,328     12,721      6,488
   Cost of sales related
     to termination charge    --         --       1,119        --
                        --------------------  --------------------
Gross profit               10,448      5,437     21,267     16,528
                        --------------------  --------------------
Operating expenses
   Research and development 6,931      5,020     17,805     12,555
   Selling, general
     and administrative     4,328      3,022     10,206      7,021
   Amortization and other     --          83        --         583
                        --------------------  --------------------
Total operating expenses   11,259      8,125     28,011     20,159
                        --------------------  --------------------
Loss from operations         (811)    (2,688)    (6,744)    (3,631)
   Interest (expense)
     income, net              553        (48)       253        (20)
                        --------------------  --------------------
Loss before income taxes     (258)    (2,736)    (6,491)    (3,651)
   Income tax benefit         --      (1,008)       --      (1,261)
                        --------------------  --------------------
Net loss                $    (258) $  (1,728) $  (6,491) $  (2,390)

Preferred stock deemed
  dividend and accretion      --         --      (3,466)       --
                        --------------------  --------------------
Net loss attributable
  to common stockholders$    (258) $  (1,728) $  (9,957) $  (2,390)
                        ====================  ====================

Basic and diluted net loss
  per share attributable
  to common shareholders$   (0.01) $   (0.15) $   (0.68) $   (0.20)
                        ====================  ====================
Weighted average shares of
  common stock outstanding
  used in computing basic
  and diluted net loss
  per share            18,465,506 11,908,676 14,650,418 11,840,487
                       ===================== =====================

                                   September 30,    December 31,
                                       1999             1998
                                   ------------     -----------

Balance sheet data:
Cash and cash equivalents               $46,184         $    12
Accounts receivable, net                  6,817           3,896
Inventories                               5,184             912
Total assets                             68,309          13,430
Long-term debt and capital
  lease obligations                         477           5,506
Stockholders' equity (deficit)           53,133          (1,293)