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Ikanos Communications Reports Record Revenue for the Fourth Quarter 2009
(Market Wire Via Acquire Media NewsEdge) FREMONT, CA -- (MARKET WIRE) -- 02/08/10 --
Ikanos Communications, Inc. (NASDAQ: IKAN)
Recent Highlights:
-- Reported Record Revenue for the Fourth Quarter
-- Non-GAAP Net Income of $1.5M, Non-GAAP EPS of $0.03
-- Company Expands Development and Partners to Address Wired and Wireless
Broadband Market Opportunities
Ikanos Communications, Inc. (NASDAQ: IKAN), a leading provider of advanced
broadband semiconductor and software products for the digital home, today
reported its financial results for the fourth quarter and fiscal year ended
January 3, 2010.
"Ikanos delivered record revenue and returned to profitability on a
non-GAAP basis in the fourth quarter," said Michael Gulett, president and
CEO of Ikanos. "We completed our first full quarter since the acquisition
of the Conexant broadband business and effectively executed our business
plan. We grew and diversified our revenue base across multiple regions,
customers and product lines, we consolidated development efforts and
reduced operating expenses, and we were able to begin redirecting
engineering investments towards new markets for future growth."
Financial Highlights:
Revenue for the fourth quarter of 2009 was $58.2 million compared with
revenue of $29.3 million for the third quarter of 2009 and revenue of $22.8
million for the year ago period. Revenue for the year ended January 3, 2010
was $130.7 million compared with the $106.5 million reported for the year
ended December 28, 2008.
Ikanos reports its financial results in accordance with U.S. generally
accepted accounting principles (GAAP) and additionally on a non-GAAP basis.
Non-GAAP net income (loss), where applicable, excludes the income statement
effects of stock-based compensation, restructuring charges and certain
expenses resulting from acquisitions such as transaction-related expenses,
amortization of intangible assets, asset impairments, investment
impairments, one time severance expenses, fair value adjustment of the
acquired inventory, in-process research and development charges and gain on
sale of securities. Ikanos has provided these measures because management
believes these additional non-GAAP measures are useful to investors for
performing financial analysis as these additional measures highlight
Ikanos' recurring operating results. Ikanos' management uses these non-GAAP
measures internally to evaluate its operating performance and to plan for
its future. However, non-GAAP measures are not a substitute for GAAP
reporting. For a reconciliation of GAAP versus non-GAAP financial
information, please see the attached schedules.
GAAP net loss for the fourth quarter of 2009 was $9.1 million, or $0.17 per
share, on 53.9 million weighted average shares. This compares with a net
loss of $15.5 million, or $0.40 per share, on 38.8 million weighted average
shares in the third quarter of 2009 and with a net loss of $5.7 million, or
$0.20 per share, on 28.9 million weighted average shares in the fourth
quarter of 2008.
Non-GAAP net income for the fourth quarter of 2009 was $1.5 million, or
$0.03 per diluted share, on 56.1 million weighted average shares. This
compares with non-GAAP net loss of $4.5 million, or $0.12 per share, in the
third quarter of fiscal 2009, and with a non-GAAP net loss of $2.4 million,
or $0.08 per share, in the fourth quarter of 2008.
GAAP net loss for the year ended January 3, 2010 was $37.1 million, or
$0.97 per share, on 38.1 million weighted average shares. This compares
with a net loss of $41.1 million, or $1.41 per share, on 29.1 million
weighted average shares for the year ago period.
Non-GAAP net loss for the year ended January 3, 2010 was $8.5 million, or
$0.22 per share, compared with non-GAAP net loss of $3.0 million, or $0.10
per share, for the year ago period. Weighted average shares used in
computing non-GAAP net loss per share were 38.1 million in 2009 and 29.1
million in 2008.
Recent Highlights:
-- Ikanos and picoChip -- a leading provider of femtocell technology
products that enable new types of cellular communications service --
are making possible single box multiservice gateways that support the
integration of smart mobile devices into the home network. These
products will enable improved cellular coverage and will enhance the
mobile broadband experience with the delivery of rich media content,
such as video to the wireless handset. Sagemcom, one of Europe's
leading developers of advanced broadband communications equipment, has
selected the Ikanos and picoChip-based femtocell/xDSL gateway for
worldwide deployments.
-- Ikanos and Aricent?, a global innovation, technology and service
company focused exclusively on communications, introduced a
production-ready platform for advanced next-generation broadband access
products. This combination creates a unified product for addressing
WiMAX and Long Term Evolution (LTE) functionality and building advanced
wireless broadband access devices including mobile broadband routers
(MBR) and femtocell base stations.
-- Teracom Ltd. has selected the Ikanos Solos communications processor as
the core of its high-performance integrated access devices (IADs).
These products will be used to extend advanced wireless, voice and data
services to millions of consumers throughout India, and other countries
in the region. Teracom counts some of the most demanding carriers in
the region as customers, including the largest, Bharat Sanchar Nigam
Ltd. (BSNL).
Outlook:
-- Revenue is expected to be between $54.0 million and $58.0 million for
the first quarter of 2010.
-- Non-GAAP gross margins are expected to be between 44% and 46% in the
first quarter of 2010. GAAP gross margins in the first quarter of 2010
will be lower than non-GAAP gross margins, as they will include
amortization of acquisition-related intangibles of approximately $1.5
million and the amortization of the fair-value of acquired inventory of
approximately $1.5 million.
-- Non-GAAP operating expenses are expected to be in the range of $23.0 to
$24.0 million in the first quarter of 2010. GAAP operating expenses in
the first quarter of 2010 will be higher than non-GAAP operating
expenses, as they will include amortization of acquisition-related
intangibles of $0.9 million, charges related to stock-based
compensation expense in accordance with FAS 123(R) of $0.9 to $1.1
million and restructuring charges of $1.4 to $1.6 million. On February
2, 2010, the Company's Board of Directors approved a restructuring
plan, consisting of the consolidation and rebalancing of its workforce
and the closure of a small research and development location. The
restructuring charges consist of estimated severance expenses of $1.2
to $1.4 million and facility exit costs of approximately $0.2 million.
Fourth Quarter and Fiscal Year 2009 Conference Call:
Management will review the fourth quarter and fiscal year 2009 financial
results and its expectations for subsequent periods at a conference call on
February 8, 2010 at 2:00 p.m. Pacific Time. To listen to the call and view
the accompanying presentation, please visit
http://www.ikanos.com/investor/webcasts/ and click on the link provided for
the webcast or dial 706-902-1343 and enter pass code 53689862. The webcast
will be archived and available through February 15, 2010 at
http://www.ikanos.com/investor/webcasts/ or by calling 706-645-9291 and
enter pass code 53689862.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (NASDAQ: IKAN) is a leading provider of
advanced broadband semiconductor and software products for the digital
home. The company's broadband DSL, communications processors and other
offerings power access infrastructure and customer premises equipment for
many of the world's leading network equipment manufacturers and
telecommunications service providers. For more information, visit
www.ikanos.com.
© 2010 Ikanos Communications, Inc. All Rights Reserved. Ikanos
Communications, Ikanos, the Ikanos logo, the Bandwidth without boundaries
tagline, Fusiv, Fx, and FxS, iQV and Ikanos Velocity are among the
trademarks or registered trademarks of Ikanos Communications. All other
trademarks mentioned herein are properties of their respective holders.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995
This document contains forward-looking statements that are subject to risks
and uncertainties concerning Ikanos Communications, including statements
regarding the expected revenue for the first quarter of 2010, expected
gross margins for the first quarter of 2010, expected operating expenses
for the first quarter of 2010, engineering investments in PON and wired
home networking technologies, and new product deployments with picoChip,
Aricent, and Teracom Ltd.. Actual events or results may differ materially
from those described in this document due to a number of risks and
uncertainties. These potential risks and uncertainties include, but are not
limited to effects of the on-going worldwide economic recession on our
customers' purchasing plans, our ability to deliver full production
releases of our newer products and the acceptance of those products our
customers, the continued demand by telecommunications service providers for
ADSL and VDSL semiconductor products, the failure of service providers to
implement deployment plans on schedule or at all, our continued ability to
obtain and deliver production volumes of new and current products and
technologies, our ability to generate demand and close transactions for the
sale of our products, our ability to develop commercially successful
products as a result of our current research and development programs, and
unexpected future costs, expenses and financing requirements. In addition,
for a more extensive discussion of such risks and uncertainties, which
could cause actual results to differ from those contained in
the forward-looking statements, see the section entitled "Risk Factors" in
Ikanos' most recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q, as well as other reports that Ikanos files from time to time with the
Securities and Exchange Commission. Ikanos is under no obligation to update
these forward-looking statements to reflect events or circumstances
subsequent to date of this press release.
IKANOS COMMUNICATIONS, INC.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Year Ended
-------------------- --------------------
January December January December
3, 28, 3, 28,
2010 2008 2010 2008
--------- --------- --------- ---------
Revenue $ 58,191 $ 22,775 $ 130,688 $ 106,505
Cost of revenue 40,590 13,562 85,019 61,827
--------- --------- --------- ---------
Gross profit 17,601 9,213 45,669 44,678
--------- --------- --------- ---------
Operating expenses:
Research and development 18,061 9,715 49,805 43,231
Selling, general and
administrative 9,679 5,541 30,974 25,823
Asset impairments - - 2,460 12,496
Restructuring charges 290 - 1,338 -
--------- --------- --------- ---------
Total operating expenses 28,030 15,256 84,577 81,550
--------- --------- --------- ---------
Loss from operations (10,429) (6,043) (38,908) (36,872)
Investment gain (impairment) 1,238 - 1,238 (6,166)
Interest income, net 124 476 727 2,145
--------- --------- --------- ---------
Loss before income taxes (9,067) (5,567) (36,943) (40,893)
Provision for income taxes 47 123 158 220
--------- --------- --------- ---------
Net loss $ (9,114) $ (5,690) $ (37,101) $ (41,113)
========= ========= ========= =========
Basic and diluted net loss per
share $ (0.17) $ (0.20) $ (0.97) $ (1.41)
========= ========= ========= =========
Weighted average number of
shares 53,883 28,917 38,098 29,084
========= ========= ========= =========
IKANOS COMMUNICATIONS, INC.
Unaudited reconciliation of GAAP to Non-GAAP Condensed Consolidated
Statements of Operations
(In thousands, except per share data)
Three Months Ended Three Months Ended
January 3, 2010 December 28, 2008
-------------------------------- -------------------------------
As Non-GAAP As Non-GAAP
Reported Adjustments Non-GAAP Reported Adjustments Non-GAAP
-------- -------- ------- -------- ------- --------
Revenue $ 58,191 $ - $58,191 $ 22,775 $ - $ 22,775
Cost of
revenue 40,590 (104) (a) 32,693 13,562 (75) (a) 12,387
- (1,803) (b) - - (763) (b) -
- (5,990) (c) - - (337) (c) -
-------- -------- ------- -------- ------- --------
Gross
profit 17,601 (7,897) 25,498 9,213 (1,175) 10,388
-------- -------- ------- -------- ------- --------
Operating
expenses:
Research
and
devel-
opment 18,061 (947) (a) 17,114 9,715 (1,031) (a) 8,684
Selling,
general
and
administra-
tive 9,679 (449) (a) 6,924 5,541 (734) (a) 4,436
- (2,306) (b) - - (371) (b) -
Restruc-
turing
charges 290 (290) (d) - - - -
-------- -------- ------- -------- ------- --------
Total
operating
expenses 28,030 (3,992) 24,038 15,256 (2,136) 13,120
-------- -------- ------- -------- ------- --------
Loss from
operations (10,429) 11,889 1,460 (6,043) 3,311 (2,732)
Investment
gain 1,238 (1,238) (e) - - - -
Interest
income
and other,
net 124 - 124 476 - 476
-------- -------- ------- -------- ------- --------
Loss
before
income
taxes (9,067) 10,651 1,584 (5,567) 3,311 (2,256)
Provision
for
income
taxes 47 - 47 123 - 123
-------- -------- ------- -------- ------- --------
Net income
(loss) $ (9,114) $ 10,651 $ 1,537 $ (5,690) $ 3,311 $ (2,379)
======== ======== ======= ======== ======= ========
Net income
(loss)
per
share:
Basic $ (0.17) $ 0.03 $ (0.20) $ (0.08)
Diluted $ (0.17) $ 0.03 $ (0.20) $ (0.08)
Weighted
average
outstanding
shares:
Basic 53,883 53,883 28,917 28,917
Diluted 53,883 56,058 28,917 28,917
Notes: Three Months Ended
------------------
January December
3, 2010 28, 2008
-------- ---------
(a) Stock-based compensation $ 1,500 $ 1,840
(b) Amortization of acquired intangible assets 4,109 1,134
(c) Fair-value adjustment of acquired inventory 5,990 337
(d) Restructuring charges 290 -
(e) Gain on sale of securities (1,238) -
-------- ---------
Total non-GAAP adjustments $ 10,651 $ 3,311
======== =========
IKANOS COMMUNICATIONS, INC.
Unaudited reconciliation of GAAP to Non-GAAP Condensed Consolidated
Statements of Operations
(In thousands, except per share data)
Year Ended
January 3, 2010
------------------------------------
As Non-GAAP
Reported Adjustments Non-GAAP
--------- ----------- --------
Revenue $ 130,688 $ - $130,688
Cost of revenue 85,019 (313) (a) 72,950
- (4,275) (b) -
- (7,481) (c) -
--------- ----------- --------
Gross profit 45,669 (12,069) 57,738
--------- ----------- --------
Operating expenses:
Research and development 49,805 (3,261) (a) 46,094
- (450) (d) -
- - -
- - -
Selling, general and
administrative 30,974 (2,346) (a) 20,707
- (3,932) (b) -
- (3,989) (d) -
Asset impairments 2,460 (2,460) (e) -
Restructuring charges 1,338 (1,338) (f) -
--------- ----------- --------
Total operating expenses 84,577 (17,776) 66,801
--------- ----------- --------
Loss from operations (38,908) 29,845 (9,063)
Investment gain (impairment) 1,238 (1,238) (g) -
Interest income and other, net 727 - 727
--------- ----------- --------
Loss before income taxes (36,943) 28,607 (8,336)
Provision for income taxes 158 - 158
--------- ----------- --------
Net loss $ (37,101) $ 28,607 $ (8,494)
========= =========== ========
Net loss per share:
Basic $ (0.97) $ (0.22)
Diluted $ (0.97) $ (0.22)
Weighted average outstanding shares:
Basic 38,098 38,098
Diluted 38,098 38,098
Year Ended
December 28, 2008
------------------------------------
As Non-GAAP
Reported Adjustments Non-GAAP
--------- ----------- --------
Revenue $ 106,505 $ - $ 106,505
Cost of revenue 61,827 (305) (a) 56,215
- (3,507) (b) -
- (1,800) (c) -
--------- ----------- ---------
Gross profit 44,678 (5,612) 50,290
--------- ----------- ---------
Operating expenses:
Research and development 43,231 (5,258) (a) 37,186
- (375) (b) -
- (102) (h) -
- (310) (e) -
Selling, general and
administrative 25,823 (4,923) (a) 17,998
- (2,270) (b) -
- (632) (h) -
Asset impairments 12,496 (12,496) (e) -
Restructuring charges - - -
--------- ----------- ---------
Total operating expenses 81,550 (26,366) 55,184
--------- ----------- ---------
Loss from operations (36,872) 31,978 (4,894)
Investment gain (impairment) (6,166) 6,166 (g) -
Interest income and other, net 2,145 - 2,145
--------- ----------- ---------
Loss before income taxes (40,893) 38,144 (2,749)
Provision for income taxes 220 - 220
--------- ----------- ---------
Net loss $ (41,113) $ 38,144 $ (2,969)
========= =========== =========
Net loss per share:
Basic $ (1.41) $ (0.10)
Diluted $ (1.41) $ (0.10)
Weighted average outstanding shares:
Basic 29,084 29,084
Diluted 29,084 29,084
Notes: Year Ended
------------------
January December
3, 2010 28, 2008
-------- ---------
(a) Stock-based compensation $ 5,920 $ 10,486
(b) Amortization of acquired intangible assets 8,207 6,152
(c) Fair-value adjustment of acquired inventory 7,481 1,800
(d) Transaction-related expenses 4,439 -
(e) Impairments of assets and in-process R&D 2,460 12,806
(f) Restructuring charges 1,338 -
(g) Investment (gain) impairment (1,238) 6,166
(h) Severance - 734
-------- ---------
Total non-GAAP adjustments $ 28,607 $ 38,144
======== =========
IKANOS COMMUNICATIONS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
January December
3, 28,
2010 2008
--------- ---------
Assets
Current assets:
Cash, cash equivalents and short-term investments $ 27,540 $ 63,339
Accounts receivable, net 34,995 12,360
Inventory 35,050 12,489
Prepaid expenses and other current assets 2,155 1,744
--------- ---------
Total current assets 99,740 89,932
Property and equipment, net 7,502 9,597
Intangible assets, net 25,359 6,290
Goodwill 8,633 -
Other assets 1,766 1,614
--------- ---------
$ 143,000 $ 107,433
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 26,641 $ 9,237
Accrued liabilities 17,050 8,680
--------- ---------
Total current liabilities 43,691 17,917
Other liabilities 2,193 -
--------- ---------
Total liabilities 45,884 17,917
Stockholders' equity 97,116 89,516
--------- ---------
$ 143,000 $ 107,433
========= =========
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Contacts:
Investor Relations
Bonnie Mott
Ikanos Communications
510-438-5360
Email Contact
Media Relations
Margo Westfall
Ikanos Communications
510-438-6276
Email Contact
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