Calabasas, CA (Thursday, February 05, 1998)
Tekelec (Nasdaq/NM: TKLC) today reported financial results for the fourth quarter and year ended December 31, 1997.
Revenues for the fourth quarter of 1997 increased 81% to $43,374,000 from $24,006,000 in the fourth quarter of 1996. Net income for the quarter was $8,937,000, or $0.31 per share (diluted), compared to net income of $2,594,000, or $0.10 per share (diluted), for the fourth quarter of 1996.
Revenues for the year grew 74% to $125,140,000 from $72,126,000 in 1996. Net income for the year was $28,996,000, or $1.02 per share (diluted), including a one-time tax benefit of $8,960,000, or $0.32 per share, recorded during the third quarter of 1997. Income before the one-time tax benefit was $20,036,000, or $0.70 per share (diluted), compared to a net loss of $2,511,000, or $0.11 per share (diluted) in 1996.
Per share results and weighted average number of shares outstanding have been retroactively adjusted to reflect the two-for-one split of the Company’s Common Stock effected in August 1997.
Orders for the Company’s products in the fourth quarter increased 68% from the fourth quarter of 1996 to $41,990,000 and consisted of $27,104,000 of switching products and $14,886,000 of diagnostic products. The Company’s backlog at December 31, 1997 amounted to approximately $59,000,000.
Allan Toomer, President, commented, “Our record fourth quarter performance caps a remarkable year for Tekelec. We continued to receive strong orders for our unique EAGLE STP switching platform and Local Number Portability (LNP) solution, including additional orders from Bell Atlantic Corporation scheduled for first quarter delivery. Customers for our LNP solution included Cincinnati Bell, GST Telecom, GTE-INS and Southern New England Telephone. New customers for our EAGLE STP were AT&T Hawaii, Bell Canada, Cantel in Canada, 3600 Communications, Ondacom in Chile, US Exchange and a lab for MCI. As we previously announced, we were also chosen by Telkom South Africa, Ltd. to supply multiple STP’s for the build-out of their network over the next three years. Also, during the quarter, we successfully completed the final phases of our product acceptance with Bell Atlantic Corporation and received the 1997 Bell Atlantic Supplier Excellence Award for our EAGLE STP. ”
Mr. Toomer added, “Solid demand for our MGTS diagnostic products worldwide also contributed strongly to our record performance and we continue our efforts on capitalizing on the opportunities for the Chameleon products. While we expect to experience some of our historic seasonality in the first quarter, we are pleased to enter the quarter with a strong backlog and growing demand for our products.”
Mr. Toomer concluded, “We are very pleased with our 1997 performance. We believe that our dedication to customer satisfaction, product quality and delivering on our commitments provide a strong foundation for our continued success in 1998 and beyond.”
With the exception of the actual reported financial results and statements of historical fact, the statements made in this news release are forward looking, reflect the Company’s current expectations and involve certain risks and uncertainties. There can be no assurance that the Company’s actual future performance will meet the Company’s expectations. As discussed in the Company’s 1996 Annual Report on Form 10-K, the Company’s future operating results are difficult to predict and subject to significant fluctuations.
Factors that may cause future results to differ materially from the Company’s current expectations include, among others: timing of significant orders and shipments, product mix, capital spending patterns of customers, competition and pricing, new product introductions by the Company or its competitors, carrier deployment of intelligent network services, the timing of research and development expenditures, regulatory changes and general economic conditions.
Tekelec is a leading supplier of advanced diagnostic systems and innovative network switching solutions that enable rapid delivery of advanced communication products and services for the global communications marketplace. Tekelec’s diagnostic systems are used by communication suppliers and service providers to design, install and maintain their communications equipment and networks. Tekelec’s EAGLE STP switching platform is designed to meet the complex requirements of SS7 networks and enable wireline and wireless network operators to deliver intelligent network services.
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOLLOW
Allan Toomer 
