Investor Relations
UTStarcom Releases Second Quarter 2006 Financial Results
ALAMEDA, Calif., Aug. 9 /PRNewswire-FirstCall/ -- UTStarcom, Inc.
(Nasdaq: UTSI), a global leader in IP-based, end-to-end networking solutions
and services, today reported financial results for the second quarter of 2006.
UTStarcom Releases Second Quarter 2006 Financial Results
Second Quarter Revenues of $549.1 Million, Gross Margins of 19.9%, and Loss per Share of ($0.18)
Positive Cash Flow from Operations of Approximately $25 Million in the Second Quarter
(Logo: http://www.newscom.com/cgi-bin/prnh/20051013/SFTH063LOGO )
Net sales for the second quarter of 2006 were
margins for the second quarter were 19.9% and GAAP net loss for the quarter
was
'We are pleased that we continue to demonstrate progress each quarter,'
stated
UTStarcom. 'We believe we are making meaningful improvements to position the
company for long-term profitable growth.'
The Company's cash balance was approximately
the second quarter, reflecting approximately
from operations, offset by approximately
term debt in the quarter.
'We are seeing real demand for our technology on a worldwide basis and are
particularly encouraged by the interest in our IPTV solution which is showing
initial traction in
executive officer of UTStarcom. 'We believe that our global leadership in
IPTV is based on the superiority of our architecture and the significant lead
in time-to-market.'
Consolidated Third Quarter 2006 Guidance
Total Revenues: Approximately $590-$625 million
Gross Profit Margin: Total Company: 16.5-18.5%
Operating Expenses: Approximately: $135-$140 million,
including approximately $4 million in
expenses associated with stock
compensation
GAAP EPS: Loss of approximately ($0.23) to
($0.33)
Conference Call The Company will conduct a conference call, which is open to the public,
to discuss these results. The call will take place today,
States
A replay of the call will be available from approximately
on
replay numbers are as follows:
706-645-9291. The Access Code is 3775097.
Investors will also have the opportunity to listen to the conference call
and the replay over the Internet through UTStarcom's Web site at:
www.utstar.com .
To listen to the live call, please go to the Web site at least 15 minutes
early to register and to download and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will also be
available on this site.
About UTStarcom, Inc.
UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. The company sells its broadband,
wireless, and handset solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables its customers
to rapidly deploy revenue-generating access services using their existing
infrastructure, while providing a migration path to cost-efficient, end-to-end
IP networks. Founded in 1991 and headquartered in Alameda, California, the
company has research and design operations in the
and
For more information about UTStarcom, visit the company's Web site at
www.utstar.com .
Forward-Looking Statements
This release includes forward-looking statements, including the foregoing
statements regarding the anticipated continued improvement in the Company's
financial results and long-term profitable growth, and the guidance given for
anticipated total revenues, gross profit margin, operating expenses (including
expenses associated with stock compensation) and earnings per share for the
third quarter of 2006. These statements are forward-looking in nature and
subject to risks and uncertainties that may cause actual results to differ
materially. These risk factors include rapidly changing technology, the
changing nature of global telecommunications markets, the termination of
significant contracts, the direction and results of future research and
development efforts, evolving product and applications standards, reduction or
delays in system deployments, product transitions, potential non-realization
of backlog, changes in demand for and acceptance of the Company's products,
general adverse economic conditions, and trends and uncertainties such as
changes in government regulation and licensing requirements. The Company also
refers readers to the risk factors identified in its latest Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
filed with the Securities and Exchange Commission.
UTStarcom, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)
June 30, December 31,
ASSETS 2006 2005
Current assets:
Cash, cash equivalents and short-term
investments $657,613 $658,837
Accounts receivable, net 424,617 522,964
Notes receivable 11,593 2,065
Inventories 455,015 425,955
Deferred costs/Inventories at
customer sites under contracts 256,812 239,876
Prepaids 60,085 61,795
Short-term restricted cash and
investments 71,119 53,680
Other current assets 34,092 37,267
Total current assets 1,970,946 2,002,439
Property, plant and equipment, net 216,325 233,403
Long-term investments 29,824 26,023
Goodwill 3,063 3,063
Intangible assets, net 65,568 75,313
Other long-term assets 31,092 25,811
Total assets $2,316,818 $2,366,052
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $363,097 $320,677
Short-term debt 122,587 198,826
Income taxes payable 37,101 33,608
Customer advances 291,964 221,301
Deferred revenue 66,776 69,030
Other current liabilities 218,194 289,867
Total current liabilities 1,099,719 1,133,309
Long-term debt 274,900 274,900
Other long-term liabilities 27,470 20,958
Total liabilities 1,402,089 1,429,167
Minority interest in consolidated
subsidiaries 7,593 8,338
Stockholders' equity:
Common stock: $0.00125 par value;
authorized: 750,000,000 shares;
issued and outstanding: 120,618,764
and 120,585,158 at June 30, 2006 and
December 31, 2005, respectively 152 152
Additional paid-in capital 1,171,175 1,168,166
Deferred stock compensation - (3,493)
Accumulated deficit (285,252) (253,174)
Accumulated other comprehensive
income 21,061 16,896
Total stockholders' equity 907,136 928,547
Total liabilities, minority interest
and stockholders' equity $2,316,818 $2,366,052
UTStarcom, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2006 2005 2006 2005
As restated As restated
Net sales $549,146 $719,759 $1,145,717 $1,621,643
Cost of net sales 439,860 607,621 913,977 1,272,081
Gross profit 109,286 112,138 231,740 349,562
Operating expenses:
Selling, general and
administrative 82,423 103,009 165,593 212,020
Research and development 46,743 65,621 93,052 131,881
Amortization of intangible
assets 4,821 6,776 9,746 13,748
In-process research and
development - 660 - 660
Restructuring costs - 15,127 - 15,127
Total operating expenses 133,987 191,193 268,391 373,436
Operating loss (24,701) (79,055) (36,651) (23,874)
Interest income (expense), net 781 (3,259) 812 (6,188)
Other income, net 6,887 8,867 10,454 2,020
Loss before income taxes,
minority interest and equity
in loss of affiliated
companies (17,033) (73,447) (25,385) (28,042)
Income tax expense (4,669) (240) (7,508) (7,920)
Minority interest in losses of
consolidated subsidiaries 259 313 815 91
Equity in loss of affiliated
companies - (574) - (1,033)
Net loss $(21,443) $(73,948) $(32,078) $(36,904)
Loss per share - Basic and
diluted $(0.18) $(0.64) $(0.27) $(0.32)
Weighted average shares used
in per-share calculation:
- Basic and diluted 120,608 114,880 120,604 114,702
UTStarcom, Inc.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(Unaudited)
Six months ended June 30,
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES: As restated
Net loss $(32,078) $(36,904)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation and amortization 34,653 51,411
Loss on sale and disposal of assets 2,169 3,684
Loss on asset impairment - 6,739
Stock compensation expense 8,769 1,153
Provision for doubtful accounts 3,133 33,609
Provision for inventory reserve 5,978 28,241
Deferred income taxes - 97,466
Gain on extinguishment of debt - (11,094)
Other (2,930) 2,768
Changes in operating assets and
liabilities, net of acquisition:
Accounts receivable 97,596 (74,915)
Inventories (36,916) 41,929
Deferred costs/Inventories at
customer sites under contracts (13,677) (31,966)
Other current and non-current assets (7,784) 58,378
Accounts payable 39,693 24,830
Income taxes payable 3,438 (140,379)
Customer advances 69,280 (225,238)
Deferred revenue (2,699) 19,892
Other current liabilities (89,469) 11,035
Net cash provided by (used in)
operating activities 79,156 (139,361)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and
equipment (12,288) (46,325)
Investment in affiliates, net of cash
acquired (302) (2,550)
Purchase of business, net of cash
acquired - (23,806)
Proceeds from sale of business 19,965 -
Proceeds from disposal of property - 663
Change in restricted cash and
investments (19,994) 2,708
Purchase of short-term investments (21,810) (123,768)
Proceeds from sale of short-term
investments 25,588 228,649
Other 1,672 (750)
Net cash (used in) provided by
investing activities (7,169) 34,821
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowing 62,545 278,381
Payments on borrowings (140,053) (373,081)
Cash paid to extinguish debt - (15,781)
Other 1,967 4,579
Net cash used in financing activities (75,541) (105,902)
Effect of exchange rate changes on
cash and cash equivalents 5,257 (1,766)
Net increase (decrease) in cash and
cash equivalents 1,703 (212,208)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 645,571 562,532
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $647,274 $350,324
Supplemental disclosure of cash flow
information:
Cash paid:
Interest $4,596 $8,179
Income taxes $3,529 $11,387
Non-cash operating activity
Accounts receivable transferred to
notes receivable $15,376 $34,551
Property, plant and equipment
exchanged for long-term investment $5,500 $-
SOURCE UTStarcom, Inc.