Riverstone posts $13.8 M Q3 net

By SiliconIndia   |   Thursday, 19 December 2002, 08:00 Hrs
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SANTA CLARA: Metropolitan area networking pioneer Riverstone Networks, Inc. (Nasdaq:RSTN) Thursday reported revenues of $13.8 million for the third quarter of fiscal 2003.

This is an increase of 29 percent over revenues of $10.7 million in the prior quarter. Revenues for the third quarter of fiscal 2002 were $60.1 million, the company said.

GAAP net loss for the third quarter was $27.8 million or $0.23 per share. This compares to second quarter fiscal 2003 GAAP net loss of $58.0 million, or $0.47 per share and third quarter fiscal 2002 GAAP net income of $2.2 million or $0.02 per share. Third quarter fiscal 2003 GAAP net loss includes a $6.3 million gain, net of tax, on debt retirement, an $11.5 million gain from the settlement of a lawsuit, a bad debt reserve of $9.8 million, a $580,000 stock-based compensation charge, and impairment charges of $24.3 million related to investments in privately-held companies.

"During the third quarter we made noticeable progress on our priorities to extend our worldwide geographic reach and increase our penetration into both the telecommunication and mission critical networking markets," said Romulus Pereira, president and CEO of Riverstone Networks. "While the worldwide marketplace remains soft, new customers such as the Pentagon and Telefonica de Espana give us confidence in both our strategy and the resiliency of the market."

Riverstone also announced today that it has entered into an agreement to acquire privately held Pipal Systems, a Santa Clara, Calif.-based development stage networking company. Founded in 2001 by veterans of several leading networking companies, including Nortel Networks, Shasta Networks, and Redback Networks, Pipal Systems is developing a new generation of advanced Ethernet and MPLS technologies that are expected to bring enhanced network functionality and service creation capabilities to carrier, campus metro and other mission critical networks.

The agreement was approved by the boards of directors of both companies and is expected to close in the fourth quarter of fiscal 2003 pending the approval of Pipal's shareholders and the satisfaction of customary closing conditions. Under the terms of the deal, the consideration is comprised of 8 million shares of Riverstone common stock, $3.5 million in cash payable to Pipal shareholders, the assumption of debt totaling approximately $6.5 million, and approximately $5.8 million in compensatory and bonus arrangements tied to milestones for employees.

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