Riverstone Rolls On

Riverstone Networks Inc. (OTC: RSTN.PK) said Monday that it expects to report higher revenues and a slight drop in cash levels for its first fiscal quarter of 2005 (see Riverstone Reports Preliminary Revenue).

The router vendor's latest update came after missing its initial filing deadline of May 29 (see Riverstone Misses SEC Deadlines). The company's financial troubles over the past year have included a delisting from Nasdaq, the announcement of a probe by the SEC, and the resignation and replacement of most senior executives and board members (see Riverstone Founders Resign).

Riverstone says it will report revenues of about $12.5 million for its first fiscal quarter of 2005, slightly higher than the range of between $10.5 million and $11.5 million it has projected for the fourth fiscal quarter of 2004.

The company's cash and investments totaled $242.4 million as of May 29, compared with $254.4 million at the end of the fourth fiscal quarter of 2004, and $268.2 million for the prior quarter. Riverstone's market capitalization, interestingly, is only $154.12 million.

The company said it currently expects to file its audited financial statements for fiscal 2003 and unaudited financial statements for the first three quarters of fiscal 2004 within two weeks. In mid September it will provide an update on when it will be able to file its full year fiscal 2004 audited financial statements.Riverstone officials, however, couldn't say when the company would be able to file records for financial year 2002.

With three full years of financial statements needed to qualify for a Nasdaq listing, the company warns that it may not be able to qualify until late 2005.

But there were some positives in todays results. Riverstone pointed to the recent sale of its XGS technology to Hewlett-Packard Co. (NYSE: HPQ), which “generated a fresh influx of cash” worth $28.5 million, according to executives on the conference call yesterday (see HP Switch Deal Good for Users). The vendor has also been pushing its Ethernet credentials and building a broader base of carrier customers during recent months. According to Riverstone’s CEO Oscar Rodriguez, the company shipped its products to seven Tier-1 carriers during the last quarter, one of whom deployed two products.

However, execs on yesterday’s call said they couldn't provide any information on the company’s future product roadmap nor could they discuss in detail the company’s pending litigation (see District Court Rules on Riverstone).

Riverstone’s stock rose slightly on Monday, closing up $0.06 (5.36%) to $1.18 on lighter than usual volume.— James Rogers, Site Editor, Next-gen Data Center Forum