Financial: ACT Networks Q2 Results - Company Financial Information

EDGE, On & About AT&T, Jan 25, 1999

ACT Networks, Inc. (Nasdaq:ANET) Tuesday announced results for the second quarter ended December 31, 1998. Net income for the second quarter was $225,000 or $0.02 per share, as compared to a net loss of $483,000, or $0.05 per share, in the same period last year, and a net loss of $966,000, or $0.10 per share, in the immediately preceding quarter.

Second quarter revenues were $12,074,000 as compared to $15,310,000 in the comparable quarter for the prior year. For the six months ended December 31, 1998, the net loss was $741,000 or $0.08 per share, as compared to net loss, including $6,750,000 of in-process R&D charges related to the SourceCom transaction, of $9,429,000, or $1.03 per share, in the comparable period last year. Revenues were $26,010,000 compared to $28,331,000 in the same period last year. "We are pleased that the Company has returned to profitability in this quarter," commented Andre de Fusco, President and Chief Executive Officer of ACT Networks. "We continue to execute our business plan which calls for reengineering our business processes and cutting expenses. Additionally, this quarter we signed a supply agreement with Fore Systems, much like the Lucent agreement announced last quarter, further validating the competitiveness of our products and our new distribution strategy." "Finally, on December 22, 1998, we were delighted to announce the appointment of Marty Woll, as ACT's new Vice President of Finance and Chief Financial Officer which completes the staffing of the Company's senior management team," concluded Mr. de Fusco. ACT Networks develops, manufactures, and markets multi-service access products which support a broad range of integrated voice and data networking applications. Service providers and enterprise customers use the Company's products to build multi-service networks that are bandwidth efficient, cost-effective and easy to manage. The Company's award-winning NetPerformer product incorporates advanced voice and data compression algorithms, enhanced switching and traffic management capabilities, and state-of-the-art hardware and software integration technologies. For more information about ACT Networks, headquartered in Camarillo, CA, visit the corporate website at http://www.acti.com.

                           ACT NETWORKS INC.

                      INCOME STATEMENT HIGHLIGHTS
             (amounts in thousands, except per share data)
                       Three Months Ended       Six Months Ended
                           December 31            December 31

                         1998        1997       1998        1997
                         ----        ----       ----        ----

Net Sales              $12,074     $15,310    $26,010     $28,331
Gross Profit             7,204       8,572     15,135      15,893

Research &
  Development            3,243       3,851      6,566       7,672
SG&A                     4,361       5,897      9,701      11,582
In-process Research
  & Development                                             6,750
Restructuring Charges                             607

Operating Loss          (400)      (1,176)    (1,739)    (10,111)

Net Interest Income       625          627      1,176       1,095
                    ---------   ---------- ----------  ----------
Net Income (Loss)
  Before Taxes            225         (549)      (563)     (9,016)
(Provision) Benefit
  for Income Taxes          0           66       (178)       (413)
                    ---------   ---------- ----------   ----------
Net Income (Loss)         225         (483)      (741)     (9,429)
                    =========   ========== ==========   ==========

Net Income (Loss)
  per Share - Basic     $0.02       ($0.05)    ($0.08)     ($1.03)
Weighted Average
  Shares Outstanding    9,434        9,146      9,367       9,188
Net Income (Loss)
 per Share - Diluted   $0.02       ($0.05)    ($0.08)     ($1.03)
Shares Used in Per
  Share Calculation     9,976        9,146      9,367       9,188

                         BALANCE SHEET SUMMARY

                                December 31, 1998   June 30, 1998
                                -----------------   -------------

Cash and Cash Equivalents             $41,696          $35,018
Short Term Investments                  6,899           11,607
Accounts Receivable                    16,062           17,226
Inventory                               6,304            8,829
Other Current Assets                    1,937            1,786
Net Fixed Assets                        3,466            3,743
Goodwill and Other
  Intangible Assets, Net                2,161            2,574
Other Assets                               55               55
                                    ---------       ----------

Total Assets                           78,580           80,838
                                    =========       ==========

Current Liabilities                     5,490            8,321
Stockholders' Equity                   73,090           72,517
                                    ---------       ----------

Total Liabilities &
  Stockholders' Equity                 78,580           80,838
                                    =========       ==========