Zhone Technologies Annual Report 2004

SELECTED FINANCIAL DATA
The following selected financial data has been derived from our consolidated financial statements and
should be read in conjunction with the consolidated financial statements and notes thereto and with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial
data included elsewhere in this report. The historical results are not necessarily indicative of results to be
expected for any future period.
Year Ended December 31,
2004 2003 2002 2001 2000
(in thousands, except per share data)
Statement of Operations Data:
Net revenue ............................... $ 97,168 $ 83,138 $ 112,737 $ 110,724 $ 80,756
Cost of revenue ............................. 55,305 51,081 69,689 106,006 59,384
Gross profit ............................ 41,863 32,057 43,048 4,718 21,372
Operating expenses:
Research and product development ......... 23,210 22,495 29,802 63,869 85,959
Sales and marketing ..................... 21,958 15,859 19,676 35,472 35,153
General and administrative ............... 10,416 5,324 10,843 13,095 15,911
Purchased in-process research and
development ......................... 8,631 — 59 11,983 439
Restructuring charges .................... — — 4,531 5,115 —
Litigation settlement ..................... — 1,600 — — —
Stock-based compensation ................ 1,396 1,238 10,376 17,098 42,316
Amortization and impairment of intangible
assets ............................... 10,132 7,942 15,995 88,834 38,082
Impairment of long-lived assets ............ — — 50,759 — —
Total operating expenses ............. 75,743 54,458 142,041 235,466 217,860
Operating loss .............................. (33,880) (22,401) (98,993) (230,748) (196,488)
Other income (expense), net .................. (1,561) (2,552) (9,434) (12,627) (1,849)
Loss before income taxes ..................... (35,441) (24,953) (108,427) (243,375) (198,337)
Income tax (benefit) provision ................. 205 (7,778) 140 145 (1,866)
Net loss ................................... (35,646) (17,175) (108,567) (243,520) (196,471)
Accretion on preferred stock .................. — (12,700) (22,238) (3,325) (2,775)
Net loss applicable to holders of common stock . . . $ (35,646) $ (29,875) $(130,805) $(246,845) $(199,246)
Basic and diluted net loss per share applicable to
holders of common stock ................... $ (0.42) $ (1.87) $ (25.87) $ (59.87) $ (56.27)
Shares used in per-share calculation ............ 85,745 15,951 5,057 4,123 3,541
As of December 31,
2004 2003 2002 2001 2000
(in thousands)
Balance Sheet Data:
Cash, cash equivalents and short-term
investments .............................. $ 65,216 $ 98,256 $ 10,614 $ 24,137 $ 71,972
Working capital (deficit) ..................... 71,789 82,301 (7,957) (47,361) 53,767
Total assets ................................ 325,227 274,877 163,963 274,051 331,984
Total short-term and long-term debt ............ 41,313 33,391 38,703 100,819 47,500
Redeemable convertible preferred stock ......... — — 165,890 421,601 383,976
Stockholders’ equity (deficit). ................. $229,784 $186,879 $ (98,642) $(335,990) $(167,634)
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