NEW YORK (Dow Jones)--Redback Networks Inc. (RBAK) expects to turn its first annual profit in 2006, assuming the company's prepackaged Chapter 11 plan goes effective Nov. 30, according to Redback's plan disclosure statement.
The telecommunications equipment-maker filed for Chapter 11 bankruptcy protection early Monday after its creditors voted to support the prepackaged plan. Under the plan, Redback would eliminate substantially all of its debt and issue stock to its creditors. The debt includes $467.5 million owed to noteholders.
Redback hasn't turned a profit since it was founded in 1996. The company expects profit in 2006 with net income of $1.8 million. According to its financial projections, Redback sees net losses of $609.7 million in 2003, $15.9 million in 2004, and $7.4 million in 2005.
Redback projects a reorganization value of $100 million to $200 million.
The San Jose, Calif., company projects steadily increasing revenue through 2006, provided the plan is confirmed by the bankruptcy court and goes effective no later than Nov. 30. Redback expects revenue to come in at $114.7 million in 2003, $160.1 million in 2004, $185 million in 2005, and $220 million in 2006, according to the plan disclosure statement filed with the U.S. Bankruptcy Court in Wilmington, Del.
During that time, Redback expects operating expenses to fluctuate. The company sees operating expenses of $142.1 million in 2003, $96.2 million in 2004, $104.3 million in 2005, and $120.7 million in 2006.
-By Tom Becker, Dow Jones Newswires; 201-938-2020
(END) Dow Jones Newswires
11-03-03 1058ET
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03-11-2003 13:37
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