Zhone Technologies Annual Report 2004
Zhone Technologies Annual Report 2004
Zhone Technologies Annual Report 2004
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ZHONE TECHNOLOGIES, INC. AND SUBSIDIARIES<br />
Consolidated Statements of Operations<br />
Years ended December 31, <strong>2004</strong>, 2003, and 2002<br />
(In thousands, except per share data)<br />
<strong>2004</strong> 2003 2002<br />
Net revenue .................................................... $97,168 $ 83,138 $ 112,737<br />
Cost of revenue .................................................. 55,095 51,166 69,231<br />
Stock-based compensation ......................................... 210 (85) 458<br />
Gross profit ..................................................... 41,863 32,057 43,048<br />
Operating expenses:<br />
Research and product development (excluding non-cash stock based<br />
compensation expense of $581, $652 and $4,236, respectively) ...... 23,210 22,495 29,802<br />
Sales and marketing (excluding non-cash stock based compensation<br />
expense of $459, $(241), and $996, respectively) ................. 21,958 15,859 19,676<br />
General and administrative (excluding non-cash stock based<br />
compensation expense of $356, $827, and $5,144, respectively) ..... 10,416 5,324 10,843<br />
Purchased in-process research and development .................... 8,631 — 59<br />
Restructuring charges ......................................... — — 4,531<br />
Litigation settlement .......................................... — 1,600 —<br />
Stock-based compensation ..................................... 1,396 1,238 10,376<br />
Amortization and impairment of intangible assets .................. 10,132 7,942 15,995<br />
Impairment of long-lived assets ................................. — — 50,759<br />
Total operating expenses .................................. 75,743 54,458 142,041<br />
Operating loss ........................................... (33,880) (22,401) (98,993)<br />
Other expense, net ............................................... (1,561) (2,552) (9,434)<br />
Loss before income taxes .................................. (35,441) (24,953) (108,427)<br />
Income tax provision (benefit) ...................................... 205 (7,778) 140<br />
Net loss ................................................ (35,646) (17,175) (108,567)<br />
Accretion on preferred stock ....................................... — (12,700) (22,238)<br />
Net loss applicable to holders of common stock ................ $(35,646) $(29,875) $(130,805)<br />
Basic and diluted net loss per share applicable to holders of common stock . . $ (0.42) $ (1.87) $ (25.87)<br />
Weighted average shares outstanding used to compute basic and diluted net<br />
loss per share applicable to holders of common stock .................. 85,745 15,951 5,057<br />
All per share and weighted average share amounts have been restated retroactively to reflect the one-for-ten<br />
reverse split of common stock and the effect of the Tellium merger in 2003 (See Note 1(b)).<br />
See accompanying notes to consolidated financial statements.<br />
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