GlobeSpan reported net revenues of $108,213,000 for the first quarter of 2001, an increase of 248.4% over net revenues of $31,060,000 for the first quarter of 2000, and a decrease of 17.3% from net revenues of $130,784,000 for the fourth quarter of 2000. Pro forma net income and pro forma diluted earnings per share were $8,937,000 and $0.12, respectively, during the first quarter of 2001, compared to pro forma net income and pro forma diluted earnings per share of $1,802,000 and $0.03 in the first quarter of 2000 and to pro forma net income and pro forma diluted earnings per share of $15,651,000 and $0.20 in the fourth quarter of 2000.
GlobeSpan reports net income and diluted earnings per share on a pro forma basis, which excludes the effects of non-cash acquisition-related charges, a $48,967,000 provision for excess and obsolete inventory and certain other non-cash expenses during the first quarter of 2001, and includes income taxes at a pro forma effective tax rate of 40 percent.
The slowdown in the global telecom equipment market and customer inventory balancing problems resulted in a very challenging first quarter for us as customer requests to reduce and cancel sales orders that began in the middle of the fourth quarter continued through the end of the first quarter and into April, stated Armando Geday, GlobeSpan’s President and CEO. This slowdown, combined with customer inventory balancing problems and our decision to accelerate our customers’ transition to higher density and higher performance product, led us to make the excess and obsolete inventory provisions reflected in our first quarter financial statements. We believe we have taken the necessary action to address these conditions over the near term without jeopardizing our long-term vision and business strategy.
Our emphasis continues to be on new product introductions and we remain confident in our long-term growth opportunities, added Geday. During the first quarter, we announced the immediate availability of the G-16(TM) multi-mode chip set solution, a new 16-port ADSL chip set that provides twice the density of existing chip set solutions. The G-16 will immediately enable equipment manufactures to design and build low cost, high-density DSLAM network access line cards that utilize half the area of existing ADSL chip set solutions on the market.
