CAMBRIDGE, Mass. -- April 23, 1996 -- BBN
Corporation (NYSE:BBN) today reported revenues of $71.3 million for
the third quarter ended March 31, 1996, a 37 percent increase over
the $52 million for the same quarter in fiscal year 1995. For the
nine months ended March 31, 1996, BBN reported a 26 percent revenue
increase to $195.7 million, compared to revenues of $154.9 million
in the first nine months of last year.
BBN's Internet activities, which include managed Internet
services and value-added services, and the network management
contract with America Online (AOL), had third-quarter revenues of
$20.6 million, a 402 percent increase over the $4.1 million of the
third quarter of fiscal year 1995 and a 27 percent sequential
increase over the $16.2 million of the second quarter of fiscal
1996. For the nine-month period, revenue from BBN's Internet
activities increased 384 percent to $47.4 million, compared to
revenues of $9.8 million for the same period a year ago.
For the third quarter ended March 31, 1996, BBN reported an
operating loss of $30.2 million, which includes a $20.7 million
predominantly non-cash charge for the write-off of goodwill and
other costs associated with the company's reorganization announced
in January. The operating loss for the comparable quarter of fiscal
1995 was $5.6 million. For the nine months ended March 31, 1996,
the operating loss was $51 million, which includes the $20.7 million
charge, compared to $12.2 million for the comparable period in
fiscal 1995. On March 31, 1996, BBN's cash and short-term
investment balance was $72.5 million.
The net loss for the three and nine month periods ended March
31, 1996 was $29.1 million and $45.7 million, respectively. This
compares to net income of $74.5 million and $70.7 million for the
three and nine month periods ended March 31, 1995. Net income for
the fiscal 1995 periods includes a pre-tax gain of $105 million from
the sale of the assets of LightStream Corporation in January 1995.
The net loss per share for the three and nine months ended March
31, 1996 was $1.64 and $2.59, respectively, compared to net income
per share of $4.11 and $3.96, respectively, in the comparable
periods of fiscal 1995.
BBN's Internet activities had an operating loss of $8.6 million
for the third quarter ended March 31, 1996, compared to an operating
loss of $3.2 million for the same period a year ago and an operating
loss of $6.9 million in the second quarter of 1996. For the nine-
month period, BBN's Internet activities had an operating loss of
$23.5 million, compared to an operating loss of $5.8 million for the
comparable nine month period of last year.
BBN's losses reflect continued investment in Internet-related
infrastructure and the development of new value-added Internet
services, as well as operating losses at BBN Domain and the write-
off of goodwill and other costs. BBN is accelerating the expansion
of its national backbone network for its Internet operations in
order to meet increasing demand.
BUSINESS DIRECTION
During the third quarter, BBN began implementation of its plan
to focus the depth and breadth of the company's internetworking
skills and advanced technology on the fast-growing market for
Internet services to businesses and organizations. Among Internet
service providers, BBN offers the industry's most comprehensive
range of services targeting business requirements for internal and
external use of the Internet.
BBN provides "industrial strength" services, such as managed
Internet access; managed network security; managed web server
hosting; plus systems integration and application development
services for complete solutions, including integration of new
Internet and intranet applications with companies' legacy systems.
In addition, BBN is utilizing its advanced internetworking
technology and skills to develop solutions to emerging needs for
"bandwidth-on-demand," application security, and integration of
"best-of-breed" software from industry leaders to enable electronic
commerce applications over the Internet.
BBN continues to pursue funded research and development of
advanced internetworking technologies, which will enable future
internetworking capabilities for government and business.
INTERNET BUSINESS REVIEW
BBN Chairman and CEO George H. Conrades said, "Our progress in
growing our recurring revenue stream for Internet services and
increasing our overall revenue justifies our continued investment.
This progress reinforces my confidence in our strategy to focus our
resources on the enormous opportunity for business and
organizational use of the Internet."
BBN's Internet activities achieved significant growth and
expansion milestones during the third quarter:
-- A key metric of BBN Planet's progress is the "rent roll," which
is the annualized recurring revenue from BBN Planet's business. The
rent roll grew by 24 percent in the third quarter to $41 million
from $33 million in the second quarter of 1996.
-- BBN Planet reported 340 new, high-speed Internet access orders in
the third quarter, a 45 percent sequential increase over the 235 new
orders in the second quarter of 1996. Today, BBN provides Internet
services to more than 1,900 customers, with an average annual
recurring revenue per customer of over $20,000.
-- Significant customers that signed up with BBN Planet during the
quarter include the Chicago Mercantile Exchange, Alex. Brown &
Sons, the City of Boston, National Semiconductor, Alliance BlueCross
BlueShield and the Los Angeles Times.
-- BBN now offers its U.S.-based multinational customers Internet
connectivity through local access points in 20 countries, which it
will soon expand to 220 countries. This capability is an industry
first, providing customers with a single source for consistent,
worldwide Internet service.
-- BBN continues to expand its role in building, maintaining and
operating a portion of the America Online nationwide, high-speed,
dial-up network. Approximately 40 percent of BBN's third-quarter,
Internet-related revenue resulted from managing the AOL network, a
significant portion of which consists of pass-through circuit costs.
INTERNET BUSINESS RELATIONSHIPS
In the third quarter, BBN continued to develop relationships
with key players in the Internet industry:
-- BBN continues to work with AT&T to expand Internet services to
businesses and organizations. Tom Evslin, vice president of AT&T
WorldNet(SM) Service, said, "Managed, dedicated access to AT&T
WorldNet Service is an important part of AT&T's Internet strategy,
and technology and ongoing support from BBN Planet continue to be
significant to the success of this service. When AT&T launched its
managed Internet access service last June, BBN Planet's expertise
and reputation for high quality helped us get the service to market
quickly and convincingly. That same reputation and know-how remain
important advantages in making sales and keeping customer
satisfaction high as we cooperate to expand this service."
-- BBN, Cisco Systems, Inc., and Intel Corporation demonstrated at
the Networld+Interop trade show a standards-based Internet
infrastructure for "bandwidth on demand" that enables real-time
multimedia applications for the Internet, including desktop
videoconferencing, real-time audio, video and collaborative
computing.
-- BBN successfully launched a pilot program with Continental
Cablevision to provide cable subscribers in the Boston area with
high-speed Internet access via cable.
-- BBN signed an agreement with CMG Information Services under which
CMGI will license BBN's PINpaper(TM) intelligent agent technology
for use in CMGI companies' Internet search products.
BBN SYSTEMS AND TECHNOLOGIES
BBN Systems and Technologies is realigning its operations to
better support BBN's Internet strategy with advanced internetworking
R&D, and on pursuing certain network-centric opportunities in the
commercial and government markets.
Mr. Conrades said, "We do work for the U.S. government to enable
secure messages over sensitive Defense Department networks, and we
recently signed a contract to provide the U.S. Army with wireless,
Internetworking-based voice and video communications for mobile
operations. These and other activities have real-world application
for the military and for commerce. We believe that our advanced
development capabilities at BBN Systems and Technologies provide us
with the opportunity to commercialize next-generation Internet
technologies -- a distinct advantage over other Internet service
providers."
BBN Systems and Technologies, which now includes the activities
of BBN Hark, reported increased revenues for the third quarter,
compared to the same quarter of a year ago. Operating results
reflect losses at BBN Hark.
BBN DOMAIN
BBN Domain continued to make progress aligning its costs with
revenues. BBN Domain reported third quarter revenues of $10.5
million, and an operating loss of $.9 million, compared to revenue
of $10.2 million, and a loss of $1.5 million for the same quarter a
year ago.
Headquartered in Cambridge, Massachusetts, BBN Corporation is a
leading provider of Internet solutions to businesses and
organizations. For its fiscal year ended June 30, 1995, BBN had
revenues of $215 million. For more information, visit BBN's World
Wide Web site at href="http://www.bbn.com" target=_new>http://www.bbn.com">http://www.bbn.com
BBN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
Dollars in thousands, 1996 1995 1996 1995
thousands, except
per-share data
Revenue:
Services $ 60,440 $ 42,954 $ 168,635 $
128,346
Products 10,907 9,003 27,038
26,526
---------- ---------- ---------- ----------
71,347 51,957 195,673 154,872
---------- ---------- ---------- ----------
Costs and expenses:
Cost of services 46,349 30,799 124,177
86,801
Cost of products 3,903 2,353 9,633
9,343
Research and
development
expenses 6,447 6,613 17,530 18,832
Selling, general and
administrative
expenses 24,104 17,789 74,656 52,092
Goodwill write-off
and other charges 20,718 20,718
---------- ---------- ---------- ----------
101,521 57,554 246,714 167,068
---------- ---------- ---------- ----------
Loss from operations (30,174) (5,597) (51,041)
(12,196)
Interest income 1,186 1,724 3,877
2,934
Interest expense (1,077) (1,103) (3,336)
(3,323)
Minority interests (24) (11,826) (108)
(11,085)
Other income
(expense), net (74) 105,096 (28)
108,631
---------- ---------- ---------- ----------
Income (loss) before
income taxes (30,163) 88,294 (50,636)
84,961
Provision (benefit)
for income taxes (1,022) 13,827 (4,954)
14,227
---------- ---------- ---------- ----------
Net income (loss) $ (29,141) $ 74,467 $ (45,682) $
70,734
Net income (loss)
per share $ (1.64) $ 4.11 $ (2.59) $
3.96
Shares used in
per share
calculations 17,802,000 18,118,000 17,670,000
17,864,000
(1) The charge for three and nine months ended March 31, 1996 of
$20.7 million or $1.16 per share, relates primarily to the write-off
of goodwill and related costs of approximately $17.6 million and
certain employee-related costs in connection with the Company's
recently announced reorganization.
(2) Results for the nine months ended March 31, 1995 include revenue
of $8.4 million and an operating loss of $3.7 million, at
LightStream Corporation. LightStream Corporation, an 80%-owned
subsidiary of the
Company, sold substantially all of its assets to Cisco Systems, Inc.
on January 11, 1995.
(3) Other income for the three and nine months ended March 31, 1995
primarily includes a $105 million gain relating to the sale of
substantially all of the assets of LightStream Corporation on
January
11, 1995. It also includes amounts arising from contracts which
were
substantially completed in prior years.
BBN CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31 June 30
Dollars in thousands 1996 1995
-------- -------
(unaudited)
Assets:
Cash and cash equivalents
(includes restricted $ 43,977 $ 110,792
cash of $4,646 at
March 31, 1996 and
$12,134 at June 30, 1995)
Short-term investments 28,486
Accounts receivable, net 67,309 53,933
Other current assets 11,183 3,606
Total current assets 150,955 168,331
Property, net 39,831 30,075
Goodwill, net 17,927
Other assets 2,634 3,133
---------- ----------
$ 193,420 $ 219,466
Liabilities and Shareholders' Equity:
Payables and other liabilities $ 44,146 $ 33,803
Accrued restructuring 7,726 9,216
Deferred revenue 22,794 16,914
---------- ----------
Total current liabilities 74,666 59,933
6% convertible subordinated
debentures due 2012 73,170 73,510
Minority interests 752 3,471
Redeemable convertible
preferred stock 8,000
Shareholders' equity 36,832 82,552
---------- ----------
$ 193,420 $ 219,466
BBN CORPORATION
SUPPLEMENTAL INFORMATION
- BY BUSINESS UNIT -
(unaudited)
The following is a summary of revenues and operating income (loss)
by business unit for the three and nine months ended March 31, 1996
and 1995, presented on an as-reorganized basis.
Three Months Ended Nine Months Ended
March 31 March 31
Dollars in thousands 1996 1995 1996 1995
------ ------ ------ ------
Revenue:
Systems and
Technologies (1) $ 40,976 $ 38,475 $ 119,689 $
112,091
Internet
Activities (2) 20,557 4,113 47,382
9,815
Domain 10,529 10,230 30,066
26,607
LightStream
Corporation (3)
8,445
Intercompany
Eliminations (4) (715) (861) (1,464)
(2,086)
--------- --------- --------- ---------
$ 71,347 $ 51,957 $ 195,673 $ 154,872
Income (loss) from operations:
Systems and
Technologies (1) $ 80 $ 105 $ 2,370 $
2,628
Internet
Activities (2) (8,597) (3,192) (23,455)
(5,815)
Domain (922) (1,468) (8,825)
(3,746)
LightStream
Corporation (3)
(3,689)
Goodwill write-off
and other charges (5) (20,718) (20,718)
Unallocated corporate
expenses, net (17) (1,042) (413)
(1,574)
--------- --------- --------- ---------
$ (30,174) $ (5,597) $ (51,041) $ (12,196)
(2) Includes Planet's internet access and value-added services
business, and the America Online contract.
(3) LightStream Corporation, an 80%-owned subsidiary of the Company,
sold substantially all of its assets to Cisco Systems, Inc. on
January 11, 1995.
(4) Eliminations consist of inter-divisional sales between
business units.
(5) The charge for three and nine months ended March 31, 1996 of
$20.7 million or $1.16 per share, relates primarily to the write-off
of goodwill and related costs of approximately $17.6 million and
certain employee-related costs in connection with the Company's
recently announced reorganization.
CONTACT: BBN Corporation;
Peter W. Thonis, 617/873-3512;
Internet: pthonis@bbn.com
SCOTTS VALLEY, Calif. -- April 23, 1996 -- Seagate
Technology, Inc. (NYSE:SEG) today reported revenue, net loss and net
loss per share of $2.09 billion, $157 million and $1.57,
respectively, for the quarter ended March 29, 1996. The results for
the three months ended March 29, 1996 include charges totaling
$314.1 million for restructuring costs and other non-recurring
charges associated with the Company's merger with Conner
Peripherals, Inc. (Conner) on February 2, 1996, and one time write-
offs of in-process research and development incurred in connection
with the acquisitions of OnDemand Software in March, 1996 and the
minority interest in Arcada Software, Inc. in February, 1996. The
restructuring costs totaled $241.7 million, the one time write-offs
of in-process research and development totaled $52.8 million and the
other non-recurring charges associated with the merger totaled $19.6
million. Without the restructuring charge, the write-off of in-
process research and development and the non-recurring merger-
related costs and their related tax effects, fully diluted net
income per share for the three months ended March 29, 1996 would
have been $0.71.
Revenue, net income and fully diluted net income per share for
the quarter ended March 31, 1995 were $1.87 billion, $83 million and
$0.76, respectively. Revenue, net income and fully diluted net
income per share for the immediately preceding quarter ended
December 29, 1995 were $2.34 billion, $149 million and $1.26,
respectively. The decline in revenue from the immediately preceding
quarter was primarly due to a delay in the introduction of new
products, production delays caused by component shortages and a
decline in the shipment of tape drives.
For the nine months ended March 29, 1996, revenue, net income
and fully diluted net income per share were $6.57 billion, $112
million and $1.06, respectively. This compares with revenue, net
income and fully diluted net income per share of $5.19 billion, $206
million and $1.92, respectively for the nine months ended March 31,
1995. In addition to the $314.1 million of charges noted above, the
nine months ended March 29, 1996 include a write-off of in-process
research and development of $3.6 million in connection with a change
in accounting for the Company's 25% investment in SanDisk from the
cost to the equity method and a write-off of in-process research and
development of $2.8 million in connection with the acquisition of
Sytron Corporation.
The merger with Conner was accounted for as a pooling of
interests, and accordingly all prior periods have been restated to
reflect this transaction. Prior periods also reflect other
restatements, none of which were material to any period presented.
During the quarter ended March 29, 1996, $265.5 million
principal amount of the Company's 6-3/4% convertible subordinated
debentures were converted to 6.2 million shares of the Company's
common stock and $1.1 million were redeemed.
Seagate Technology is a data technology company that provides
products for storing, managing and accessing digital information on
the world's computer and data communications systems. Seagate, at
$8.6 billion in revenue for its last twelve months ended March 29,
1996, is the largest independent disc drive and components company
in the world. Seagate's home page address on the World Wide Web is
http://www.seagate.com" target=_new>http://www.seagate.com">http://www.seagate.com
SEAGATE TECHNOLOGY, INC
FINANCIAL HIGHLIGHTS (1)
(In Thousands Except Per Share and Percent Data)
Three Months Ended Nine Months Ended
-------------------- --------------------
Mar. 29, Mar. 31, Mar. 29, Mar. 31,
1996 1995 1996 1995
-------- -------- -------- --------
Net sales $2,093,326 $1,871,761 $6,573,822 $5,187,203
Gross profit 337,581 335,733 1,187,504 971,102
As a percent
of sales 16.1% 17.9% 18.1% 18.7%
Income (loss)
before income
taxes $ (197,463) $ 126,146 $ 192,350 $ 317,224
Provision
(benefit) for
income taxes (39,985) 43,063 80,104 117,423
Income (loss)
before
extraordinary
gain:
Amount $ (157,478) $ 83,083 $ 112,246 $ 199,801
As a percent
of sa1es (7.5%) 4.4% 1.7% 3.9%
Net income(loss):
Amount $ (157,478) $ 83,083 $ 112,246 $ 205,972
As a percent
of sales (7.5%) 4.4% 1.7% 4.0%
Income (loss) per
share before
extraordinary
gain:
Primary $ (1.57) $ 0.86 $ 1.11 $ 2.05
Fully diluted (1.57) 0.76 1.06 1.87
Net income (loss)
per share:
Primary $ (1.57) $ 0.86 $ 1.11 $ 2.11
Fully diluted (1.57) 0.76 1.06 1.92
Number of shares
used in
per share
computations:
Primary 100,412 96,436 101,330 97,458
Fully diluted 100,412 122,402 111,761 120,163
CONTACT: SEAGATE
Alan F. Shugart, CEO /
Donald L. Waite, CFO /
Julie Still, Press Relations /
Nancy Hamm, Investor Relations /
408/438-6550
PHOENIX, AZ -- April 23, 1996 -- Garth Wieger has been
named chief executive officer of UDC Homes
Inc., DMB officials
announced Tuesday.
Wieger has been Phoenix division president of Shea Homes for the
past five years. Under his leadership, Shea has become one of the
top homebuilders in Phoenix growing from 276 closings in 1990 to
1429 closings last year.
The company also announced today that a partnership managed by
Aldrich Eastman Waltch (AEW), a Boston-based real estate investment
advisor, will become an equal partner with DMB in UDC Homes. On
behalf of institutional clients, AEW has invested in several Arizona
real estate enterprises including Evans Withycombe Realty (NYSE:EWR)
and the Westcor Co., as well as in a variety of public and private
real estate operating companies throughout the country.
DMB acquired UDC Homes after it filed for Chapter 11 bankruptcy
protection in 1995. DMB is a Phoenix-based real estate developer
whose projects include the 8,000-acre DC Ranch in Scottsdale, Ariz.,
Superstition Springs in Mesa, Ariz., Centerpoint in downtown Tempe,
Ariz., Phoenix Gateway Center at 44th Street and McDowell Road and
The Financial Plaza in downtown Mesa.
UDC is the third largest homebuilder in Phoenix. In addition to
its Phoenix operation, the company has operating divisions in
Tucson, Ariz., San Jose, Calif., Los Angeles and San Diego.
Drew Brown, president of DMB said, "We are delighted to have
Garth assume the leadership role at UDC. He brings extensive
experience and demonstrated leadership abilities to the company."
Wieger said, "With the recent acquisition of UDC by DMB and the
financial strength brought to the organization, I am excited about
this opportunity. UDC has a strong presence in Phoenix, and we will
work hard to build a team that has the same presence in each of
UDC's three California divisions."
Prior to heading Shea's Phoenix operation, Wieger was vice
president of land acquisition and development for Continental Homes.
He is a graduate of San Jose State University with a degree in
business management.
CONTACT: DMB, Phoenix;
Drew Brown, 602/956-7877 /
or /
BJC, Phoenix;
Barbara DeMichele, 602/277-9530
WILTON, Conn., April 23, 1996 - Deloitte & Touche LLP
today reached a settlement with the bankruptcy Trustee of
Bonneville
Pacific Corporation resolving all claims asserted by the
Trustee in
connection with the firm's professional services provided to the
company. Under the terms of the settlement, the Trustee will
receive $65 million, a substantial portion of which will be paid by
Deloitte & Touche's professional liability insurers.
"The settlement frees us from the prospect of prolonged, costly
litigation with an uncertain outcome and is an immediate and
significant resolution for both parties," said J. Michael Cook,
Chairman and Chief Executive Officer of Deloitte & Touche.
"Although we believe that our services were performed in accordance
with professional standards, this situation was an unfortunate event
for all those touched by it. We are pleased to have it behind us."
Deloitte & Touche, one of the nation's leading professional
services firms, provides accounting and auditing, tax, and
management consulting services through more than 16,000 people and
offices in more than 100 U.S. cities.
CONTACT: Laura Maxwell of Deloitte & Touche, 203-761-3522/