IR/インベスターリレーションズ
UTStarcom Releases Financial Results for the Second Quarter of 2010
Aug. 4, 2010 (PR Newswire) --
ALAMEDA, Calif. -- UTStarcom, Inc.
(Nasdaq: UTSI), today reported financial results for the second quarter of
2010 ended June 30, 2010.
"Our second quarter performance reflects continued progress towards
restructuring the company and an improved business model," said Peter
Blackmore, UTStarcom's chief executive officer and president. "We are
optimistic about the market opportunity for IPTV and broadband in China, India
and Japan and remain focused on growing bookings in these areas to achieve
profitability."
Second quarter 2010 Financial Results
Net sales for the second quarter of 2010 were $73.2 million as compared to
$80.2 million in the second quarter of 2009. Gross margin for the second
quarter of 2010 was 31% as compared to gross loss of 20% in the second quarter
of 2009. The operating loss for the second quarter of 2010 and 2009 were $5.1
million and $85.4 million, respectively.
The GAAP net loss attributable to UTStarcom for the second quarter of 2010
was $9.0 million, or a loss of $0.07 per share, as compared to a loss of $84.3
million, or loss of $0.66 per share in the second quarter of 2009.
Second quarter 2010 GAAP operating expenses of 28.0 million include a $2.1
million net gain related to the divestiture of our IP Messaging and US PDSN
Assets in the quarter.
Net cash, cash equivalents and short-term investments as of June 30, 2010
was $308.0 million compared to $266.9 million on December 31, 2009.
Non-GAAP Results
To enable a comparison of the financial results for the Company on a year-
over-year basis the Company has prepared certain non-GAAP results which
present the Company's results as if both the divestiture of PCD and the wind-
down of the Company's Korea-based handset operations were completed as of the
beginning of the earliest time-period presented.
The second quarter of 2010 non-GAAP revenue was $73 million, non-GAAP
gross margin was 30% and non-GAAP operating loss was $6 million. This compares
to the second quarter of 2009 non-GAAP revenue of $83 million, non-GAAP gross
margin of 14% and non-GAAP operating loss of $55 million.
Conference Call
The Company will host a conference call to discuss the results at 7:00 a.m.
(PT) / 10:00 a.m. (ET) on August 4, 2010.
The conference call dial-in numbers are as follows: United States 877-405-
3429; International 702-928-6906. The conference ID number is 8821-7126.
A replay of the call will be available for 7 days. The conference call
replay numbers are as follows: United States -- 800-642-1687; International --
706-645-9291. The Access Code is 8821-7126.
Investors will also have the opportunity to listen to the conference call
and the replay over the Internet through the investor relations section of
UTStarcom's Web site at: http://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.
Discussion of Non-GAAP Financial Measures
In this earnings release, UTStarcom refers to certain non-GAAP financial
measures. Generally, a non-GAAP financial measure is a numerical measure of a
company's performance, financial position, or cash flows that either excludes
or includes amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance with GAAP.
A reconciliation between non-GAAP and GAAP measures can be found in the
accompanying tables. UTStarcom believes that, while these non-GAAP measures
are not a substitute for GAAP results, they provide a basis for the Company's
planning and forecasting of future periods. These non-GAAP measures have been
reconciled to the nearest GAAP measure as required under Securities and
Exchange Commission rules.
On July 1, 2008, the Company divested its Personal Communications Division
("PCD") which has historically represented a significant portion of the
Company's revenues. In the fourth quarter of 2008, the Company announced
actions to wind down its Korea-based handset manufacturing operations. To
enable a comparison of the financial results for the Company on a year-over-
year and a quarter-over-quarter basis the Company has prepared certain non-
GAAP results which present the Company's results as if both the divestiture of
PCD and the wind down of the Company's Korea-based handset operations were
completed prior to each time period presented. The reconciliation between GAAP
and these non-GAAP financial measures is provided at the end of this press
release and on the Company's website.
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 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 development operations in the United States, China, and India.
For more information about UTStarcom, visit the Company's Web site at
http://www.utstar.com .
Forward-Looking Statements
This release includes forward-looking statements, including statements
regarding the Company's strategy to reduce operating expenses, achieve
profitability, investment in selective products and certain geographic regions
and transition to a new business model. These statements are forward-looking
in nature and subject to risks and uncertainties that may cause actual results
to differ materially. These risks include [the ability of the Company to
realize anticipated results of operational improvements, increase bookings,
successfully transition to a new management team and headquarters location,
execute on its business plan and manage regulatory matters] as well as 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. The Company is in a period of significant transition and
in the conduct of its business is exposed to additional risks as a result. All
forward-looking statements included in this release are based upon information
available to the Company as of the date of this release, which may change, and
we assume no obligation to update any such forward-looking statement.
For further information, please contact:
Market Street Partners
Linda Rothemund
Tel: +1-415-445-3236
UTStarcom, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
June 30, December 31,
2010 2009
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $307,996 $266,881
Accounts and notes receivable, net 45,204 43,773
Inventories and deferred costs 161,321 202,753
Prepaids and other current assets 79,132 74,354
Total current assets 593,653 587,761
Long-term assets:
Property, plant and equipment, net 5,186 130,612
Long-term deferred costs 180,777 184,978
Other long-term assets 33,679 25,760
Total assets $813,295 $929,111
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $30,159 $54,115
Customer advances 147,398 120,364
Deferred revenue 162,443 170,777
Other current liabilities 101,097 147,914
Total current liabilities 441,097 493,170
Long-term liabilities:
Long-term deferred revenue and other
liabilities 135,159 179,790
Total liabilities 576,256 672,960
Total equity 237,039 256,151
Total liabilities and equity $813,295 $929,111
UTStarcom, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
Net sales $73,165 $80,163 $154,012 $199,503
Cost of net sales 50,293 96,001 103,931 193,689
Gross profit (loss) 22,872 (15,838) 50,081 5,814
31% (20)% 33% 3%
Operating expenses:
Selling, general and
administrative 21,162 26,971 51,352 81,151
Research and development 9,078 16,229 19,101 37,737
Restructuring charges / (credit) (216) 27,757 7,291 32,576
Net gain on divestiture (2,056) (1,357) (3,808) (1,357)
Total operating expenses 27,968 69,600 73,936 150,107
Operating loss (5,096) (85,438) (23,855) (144,293)
Interest income, net 382 369 660 828
Other income (expense), net (4,767) 5,429 100 (1,785)
Loss before income taxes (9,481) (79,640) (23,095) (145,250)
Income taxes expense 510 (4,659) (1,843) (6,483)
Net loss (8,971) (84,299) (24,938) (151,733)
Net loss attributable to
noncontrolling interest 6 16 10 17
Net loss attributable to
UTStarcom, Inc. $(8,965) $(84,283) $(24,928) $(151,716)
Net loss per share attributable to
UTStarcom, Inc. - Basic and
Diluted $(0.07) $(0.66) $(0.19) $(1.20)
Weighted average shares used in
per share calculation:
Basic and Diluted 130,311 127,160 129,866 126,450
UTStarcom, Inc.
Condensed Consolidated Statements of Cashflows
(in thousands)
(Unaudited)
Six months ended June 30,
2010 2009
Net cash used in operating activities $(84,964) $(37,136)
Cash flows from investing activities:
Property, plant and equipment, net (1,826) (1,337)
Net proceeds from sale of building 123,955 --
Proceeds from divestitures 1,500 --
Proceeds from settlement of an
investment interest 481 --
Purchase of an investment interest (550)
Change in restricted cash 2,998 1,404
Short-term investments, net (3,837) 808
Other 971 392
Net cash provided by investing
activities 123,692 1,267
Cash flows from financing activities:
Other (30) (389)
Net cash used in financing activities (30) (389)
Effect of exchange rate changes on
cash and cash equivalents 2,300 (749)
Net increase (decrease) in cash and cash
equivalents 40,998 (37,007)
Cash and cash equivalents at
beginning of period 265,843 309,603
Cash and cash equivalents at end of
period $306,841 $272,596
UTSTARCOM, INC.
Aug 4, 2010 Conference Call
RECONCILIATION OF GAAP REVENUE TO NON-GAAP REVENUE
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period reflected
below. We believe this enables year over year comparisons to our recent
financial results. These adjustments to our GAAP results are made with
the intent of providing both management and investors a more complete
understanding of UTStarcom's underlying results and trends. In addition,
these adjusted non-GAAP results are among the information management uses
as a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for results prepared in accordance with
generally accepted accounting principles in the United States.
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-08 -08 -08 -09 -09
GAAP Revenue (a) $181 $241 $1,641 $119 $80
Less: PCD Segment Revenue (b) -- -- 880 -- --
Less: Korea Handset Sales to PCD (c) 35 92 127 39 (3)
Non-GAAP Revenue $146 $149 $634 $80 $83
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-09 -09 -09 -10 -10
GAAP Revenue (a) $71 $116 $386 $81 $73
Less: PCD Segment Revenue (b) -- -- -- -- --
Less: Korea Handset Sales to PCD (c) 8 12 56 3 --
Non-GAAP Revenue $63 $104 $330 $78 $73
(a) GAAP Revenue for each period is the consolidated revenue as reported
on Form 10-Q or Form 10-K, as applicable, for such period, except for
the consolidated revenue for the quarters ended December 31, 2008 and
2009, which is derived from the revenue reported in the Form 10-Qs and
Form 10-K with respect to fiscal years 2008 and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Prior to the July 1, 2008 divestiture of PCD, Korea handset did not
record revenue for units shipped to PCD as this activity was an
intercompany transfer.
After July 1, 2008 this activity was recorded as a third party sale in
the Handset segment.
UTSTARCOM, INC.
Aug 4, 2010 Conference Call
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period reflected
below. We believe this enables year over year comparisons to our recent
financial results. These adjustments to our GAAP results are made with
the intent of providing both management and investors a more complete
understanding of UTStarcom's underlying results and trends. In addition,
these adjusted non-GAAP results are among the information management uses
as a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for results prepared in accordance with
generally accepted accounting principles in the United States.
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-08 -08 -08 -09 -09
GAAP Gross Profit (a) $57 $30 $261 $22 ($16)
GAAP Gross Margin % 31% 12% 16% 18% (20%)
Less: PCD Segment Gross Profit (b) -- -- 69 -- --
Less: Korea Handset Gross Profit from
Sales to PCD (c) 6 (4) 4 3 (28)
Non-GAAP Gross Profit $51 $34 $188 $19 $12
Non-GAAP Gross Margin % 35% 23% 30% 24% 14%
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-09 -09 -09 -10 -10
GAAP Gross Profit (a) $24 $35 $65 $27 $23
GAAP Gross Margin % 34% 30% 17% 34% 32%
Less: PCD Segment Gross Profit (b) -- -- -- -- --
Less: Korea Handset Gross Profit from
Sales to PCD (c) 2 2 (21) 1 1
Non-GAAP Gross Profit $22 $33 $86 $26 $22
Non-GAAP Gross Margin % 35% 32% 26% 33% 30%
(a) GAAP Gross Profit and GAAP Gross Margin % for each period is the
consolidated gross profit and gross margin % as reported on Form 10-Q
or Form 10-K, as applicable, for such period, except for the
consolidated gross profit and gross margin % for the quarter ended
December 31, 2008 and 2009, which is derived from the gross profit and
gross margin % reported in the Form 10-Qs and Form 10-K with respect
to fiscal years 2008 and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Prior to the July 1, 2008 divestiture of PCD, Korea handset earned a
gross profit on the intercompany transfer of inventory to PCD.
This gross profit was recorded in the Handset segment. After July 1,
2008 this activity was recorded as a third party transaction.
UTSTARCOM, INC.
Aug 4, 2010 Conference Call
RECONCILIATION OF GAAP OPERATING EXPENSE TO NON-GAAP OPERATING EXPENSE
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period reflected
below. We believe this enables year over year comparisons to our recent
financial results. These adjustments to our GAAP results are made with
the intent of providing both management and investors a more complete
understanding of UTStarcom's underlying results and trends. In addition,
these adjusted non-GAAP results are among the information management uses
as a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for results prepared in accordance with
generally accepted accounting principles in the United States.
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-08 -08 -08 -09 -09
GAAP Operating Expense (a) $92 $109 $437 $81 $70
Less: PCD Operating Expense (b) -- -- 15 -- --
Less: Korea Handset Operating Expense
(c) 10 5 34 3 2
Non-GAAP Operating Expense $82 $104 $388 $78 $68
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-09 -09 -09 -10 -10
GAAP Operating Expense (a) $58 $76 $285 $46 $28
Less: PCD Operating Expense (b) -- -- -- -- --
Less: Korea Handset Operating Expense
(c) 1 -- 6 -- --
Non-GAAP Operating Expense $57 $76 $279 $46 $28
(a) GAAP Operating Expense for each period is the consolidated operating
expense as reported on Form 10-Q or Form 10-K, as applicable, for such
period, except for the consolidated operating expense for the quarter
ended December 31, 2008 and 2009, which is derived from the operating
expenses reported in the Form 10-Qs and Form 10-K with respect to the
fiscal years 2008 and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Both prior to and after the July 1, 2008 divestiture of PCD, all
direct operating expense relating to Korea handset has been recorded
in the Handset segment.
UTSTARCOM, INC.
Aug 4, 2010 Conference Call
RECONCILIATION OF GAAP OPERATING LOSS TO NON-GAAP OPERATING LOSS
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period reflected
below. We believe this enables year over year comparisons to our recent
financial results. These adjustments to our GAAP results are made with
the intent of providing both management and investors a more complete
understanding of UTStarcom's underlying results and trends. In addition,
these adjusted non-GAAP results are among the information management uses
as a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for results prepared in accordance with
generally accepted accounting principles in the United States.
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-08 -08 -08 -09 -09
GAAP Operating Loss (a) ($35) ($79) ($176) ($59) ($85)
Less: PCD Operating Profit (b) -- -- 53 -- --
Less: Korea Handset Operating Income
(Loss) (c) (4) (9) (30) -- (30)
Non-GAAP Operating Loss ($31) ($70) ($199) ($59) ($55)
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-09 -09 -09 -10 -10
GAAP Operating Loss (a) ($34) ($41) ($219) ($19) ($5)
Less: PCD Operating Profit (b) -- -- -- -- --
Less: Korea Handset Operating Income
(Loss) (c) 1 2 (27) 1 1
Non-GAAP Operating Loss ($35) ($43) ($192) ($20) ($6)
(a) GAAP Operating Loss for each period is the consolidated operating loss
as reported on Form 10-Q or Form 10-K, as applicable, for such period,
except for the consolidated operating loss for the quarter ended
December 31, 2008 and 2009, which is derived from the operating loss
reported in the Form 10-Qs and Form 10-K with respect to fiscal years
2008 and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Both prior to and after the July 1, 2008 divestiture of PCD, the
operating loss relating to Korea handset has been recorded in the
Handset segment.
UTSTARCOM, INC.
Aug 4, 2010 Conference Call
ABBREVIATED NON-GAAP P&L STATEMENT (a)
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period reflected
below. We believe this enables year over year comparisons to our recent
financial results. These adjustments to our GAAP results are made with
the intent of providing both management and investors a more complete
understanding of UTStarcom's underlying results and trends. In addition,
these adjusted non-GAAP results are among the information management uses
as a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for results prepared in accordance with
generally accepted accounting principles in the United States.
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-08 -08 -08 -09 -09
Non-GAAP Revenue $146 $149 $634 $80 $83
Non-GAAP Gross Profit 51 34 188 19 12
Non-GAAP Gross Margin % 35% 23% 30% 24% 14%
Non-GAAP Operating Expense 82 104 388 78 68
Non-GAAP Operating Loss ($31) ($70) ($199) ($59) ($55)
Qtr Qtr Year Qtr Qtr
ended ended ended ended ended
30-Sep 31-Dec 31-Dec 31-Mar 30-Jun
-09 -09 -09 -10 -10
Non-GAAP Revenue $63 $104 $330 $78 $73
Non-GAAP Gross Profit 22 33 86 26 22
Non-GAAP Gross Margin % 35% 32% 26% 33% 30%
Non-GAAP Operating Expense 57 76 279 46 28
Non-GAAP Operating Loss ($35) ($43) ($192) ($20) ($6)
(a) Please refer to the preceding reconciliation tables for the
adjustments to GAAP Revenue, Gross Profit, Operating Expense and
Operating Loss.
SOURCE UTStarcom, Inc.