Network Equipment Technologies (N.E.T.) outlined a business plan to address the emerging, high-speed access requirements of the U.S. government. Working in partnership with Bay Microsystems, the company plans to develop a compact platform with high capacity switching and aggregation capabilities to provide interworking of high speed technologies, including Ethernet, SONET/SDH, Fibre Channel and Infiniband.
C. Nicholas Keating, president and CEO of N.E.T., said, "We have key opportunities before us directly related to our strongest customer base, the Federal government. In the past 90 days, as we've assessed our strengths and capabilities, it is clear that we need to, and are able to, address the emerging high-speed requirements for this important customer. As our announcement today with Bay Microsystems indicates, we will advance our current product offerings for government. Among other opportunities, we plan to provide a secure access solution for the Global Information Grid, or GIG, network."
Some additional highlight's of the company's federal work include:
- US Marine Corps Transition Switch Module (TSM) contract awarded to EDO Corporation requiring approximately 200 Promina platforms at an anticipated revenue of $25 million over five years. The company expects to take its first revenue by the end of its fiscal year, with a ramp in the next fiscal year.
- Successfully completed pseudowire emulation testing at DISA for Promina BBS platform for small sites where IP and ATM requirements can be serviced from a single switch. The company shipped approximately $2.0 million of BBS equipment to DISA and the Defense Satellite Communications System (DSCS) and other Defense customers for Promina aggregation during the quarter. Further testing and evaluation has been recommended by DISA Europe.
- The company's Promina and SHOUT equipment was used to support FEMA, at the highest levels of the DoD, and by various U.S. services, including the Navy, the Army, the National Guard and the Marines, to support the Hurricanes Katrina and Rita response effort.
- Saw first shipments of Whisper, a mobile, secure VoIP gateway built on SHOUT technology, by D-Tech to multiple branches of the Federal government and military.
Financially, N.E.T. reported revenue of $21.6 million for its second quarter of fiscal 2006, ended September 30, compared to $18.4 million for the first quarter, an increase of 17.8 percent, and $31.6 million for the second quarter of fiscal 2005, a decrease of 31.5 percent.
Product revenue was $18.1 million, compared to $14.7 million for the first quarter, an increase of 23.3 percent, and $27.5 million for the second quarter of last year, a decrease of 33.9 percent.
N.E.T. reported a net loss of $5.7 million, or $0.23 per share, compared to a net loss of $5.1 million, or $0.21 per share, for the first quarter of fiscal 2006, and net income of $1.4 million, or $0.06 per share, for the second quarter of last year.
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