Enterasys estimates $120 M Q3 revenues

By siliconindia   |   Friday, 01 November 2002, 20:30 IST
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ROCHESTER: Enterasys Networks, Inc. (NYSE: ETS) today reaffirmed its preliminary revenue estimate of $120 million for the third fiscal quarter ended September 28, 2002, consistent with the company's previous guidance. The Company also stated that its results for the third quarter are expected to show a significant reduction in cash usage, to approximately $25 million compared to approximately $75 million (excluding income tax refunds) in the preceding quarter. An official spokesperson stated that the revenue and cash usage estimates for the third quarter reflect the continuing success of its strategies to stabilize revenue, reduce the overall cost structure of the business, and return the Company to cash-positive, profitable operations as soon as possible. Included in the estimated $25 million cash use for the third fiscal quarter are non-recurring items of approximately $22 million relating to the settlement of prior period tax liabilities and approximately $11 million of expenses associated with the Company's previously announced internal review and the separate investigation by the Securities and Exchange Commission (SEC). These amounts were offset by approximately $12 million related to the net proceeds of the previously announced sale of a business and other non-operating cash receipts, the company announced in a press release. Enterasys will continue to incur costs related to the internal review and other related matters. It also stated that its cash and marketable securities balance of approximately $270 million as of September 28, 2002 is currently expected to be sufficient to meet the Company's operating and non-operating cash needs for the foreseeable future, the company said in a press release. The Company indicated that it expects to receive approximately $30 million of federal income tax refunds in the first half of 2003, relating to anticipated tax loss carrybacks for the year ending December 28, 2002. The company also said it expects to engage in discussions with the preferred stockholders concerning alternatives to this potential redemption, although there can be no assurance as to the outcome of any such discussions. Enterasys also announced that it has completed its internal review of historical revenue recognition and other financial reporting practices. All matters subject to the review have been resolved, with the exception of one accounting issue which the Company expects to resolve shortly.