Science & Technology
Science and Technology
Science and Technology
Thu, July 23, 2009
Wed, July 22, 2009 Ikanos Communications: Ikanos Communications Reports Results for Second Quarter 2009
FREMONT, CA--(Marketwire - July 22, 2009) - Ikanos Communications, Inc. (
Revenue in the second quarter of 2009 was $22.4 million compared with revenue of $20.7 million for the first quarter of 2009 and revenue of $29.9 million for the second quarter of 2008.
"Revenue for the second quarter increased 8% sequentially, driven by demand for our gateway products in Europe, Korea and Japan," said Michael Gulett, Ikanos' president and CEO. "In the quarter, we also made significant progress on our integration plans for Conexant's Broadband Access product line. Customers have provided favorable feedback on the pending deal. In addition, the synergies created by the transaction should allow the Company to be profitable on a non-GAAP basis within the first year after the close of the acquisition."
GAAP net loss for the second quarter of 2009 was $6.4 million, or $0.22 per share, on 29.4 million weighted average outstanding shares. This compares with a net loss of $6.1 million, or $0.21 per share, on 29.1 million weighted average shares in the first quarter of fiscal 2009 and with a net loss of $4.0 million, or $0.14 per share, on 29.3 million weighted average shares in the second quarter of 2008.
Non-GAAP net loss for the second quarter of 2009 was $2.8 million, or $0.09 per share. This compares with a non-GAAP net loss of $2.8 million, or $0.10 per share, in the first quarter of fiscal 2009 and with a non-GAAP net income of $1.0 million, or $0.03 per diluted share, in the second quarter of 2008.
Revenue for the six months ended June 28, 2009 was $43.2 million, compared with the $59.6 million reported for the six months ended June 29, 2008.
GAAP net loss for the six months ended June 28, 2009 was $12.5 million, or $0.43 per share, on 29.3 million weighted average shares. This compares with a net loss of $8.8 million, or $0.30 per share, on 29.4 million weighted average shares for the year ago period.
Non-GAAP net loss for the six months ended June 28, 2009 was $5.6 million, or $0.19 per share, compared with non-GAAP net income of $1.6 million, or $0.05 per diluted share, for the year ago period. Weighted average shares used in computing non-GAAP net income (loss) per share were 29.3 million in 2009 and 30.7 million in 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, fair value adjustment of the acquired inventory and in-process research and development charges. 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 schedule.
Recent Highlights:
-- Ikanos VDSL2 central office (CO) and customer premises equipment (CPE) chipsets were chosen by Ubiquoss Corporation, a leading provider of communications equipment specializing in last-mile solutions, for use in Internet protocol digital subscriber line access multiplexers (IP DSLAMS). The Ikanos-based IP DSLAMs are being utilized by one of Korea's leading telecom providers in a fiber-to-the-building (FTTB) network deployment that will provide high-speed Internet services to multi-dwelling units (MDUs) across Korea. -- Ikanos -- along with Belgacom, Belgium's leading telecommunications service provider, Alcatel-Lucent and Sagem Communications -- were awarded the 2009 Innovations Award for Fixed Network Infrastructure by Global Telecoms Business magazine. Belgacom's hybrid fiber/VDSL2 network incorporates central office (CO) and customer premises equipment (CPE) semiconductors from Ikanos, IP DSLAMs from Alcatel-Lucent and residential gateways from Sagem Communications. By using fiber and VDSL2, Belgacom is able to cost-effectively offer revenue-enhancing services. -- Ikanos' high performance Fusiv® Vx180 gateway processor was selected by Allied Data Technologies, a Dutch manufacturer of datacom and other communications equipment, for integration into advanced residential and small-to-medium enterprise (SME)-class gateways. The Ikanos-based VDSL2 multi-play gateways are targeted for deployment in IP-enabled multi-service VDSL2 access networks throughout Asia, Western Europe and the United States.
Outlook excludes the potential impact of the Broadband Access Product Line Acquisition:
-- Revenue is expected to be between $23 million and $25 million for the third quarter of 2009. -- Non-GAAP gross margins are expected to be between 43% and 45% in the third quarter of 2009. GAAP gross margins in the third quarter of 2009 will be lower than non-GAAP gross margins, as they will include amortization of acquisition-related intangibles of approximately $0.7 million and charges related to stock-based compensation expense in accordance with FAS 123(R) of approximately $0.1 million. -- Non-GAAP operating expenses are expected to be in the range of $11.5 to $12.5 million in the third quarter of 2009. GAAP operating expenses in the third quarter of 2009 will be higher than non-GAAP operating expenses, as they will include amortization of acquisition-related intangibles of $0.4 million, charges related to stock-based compensation expense in accordance with FAS 123(R) of $1.3 to $1.6 million and transaction-related expenses of $3.0 to $6.0 million, depending on the outcome of the stockholder meeting.
Second Quarter Fiscal Year 2009 Conference Call:
Management will review the second quarter 2009 financial results and its expectations for subsequent periods at a conference call on July 22, 2009 at 1:30 p.m. Pacific Daylight Time. To listen to the call, 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 19480904. The webcast will be archived and available through July 28, 2009 at [ http://www.ikanos.com/investor/webcasts/ ] or by calling 706-645-9291 and enter pass code 19480904.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (
© 2009 Ikanos Communications, Inc. All Rights Reserved. Ikanos Communications, Ikanos, the Ikanos logo, the Bandwidth without boundaries tagline, Fusiv, Fx, and FxS 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 third quarter of 2009, expected gross margins for the third quarter of 2009, expected operating expenses for the third quarter of 2009, and belief that the announced transaction will allow the company to have the improved capability to meet global demand for broadband semiconductors. 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, the complexity of combining the BBA business, 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 deliver production volumes of new products and technologies, our ability to generate demand and close transactions for the sale of our products, and unexpected future costs, expenses and financing requirements. Important factors that may cause such a difference with respect to the ability of Ikanos to close the transactions announced in this press release, the Company's future revenues, costs of sales and expenses, net income and earnings per share, product plans, market size and ability to address demand include, without limitation the inability of the Company, Conexant Systems and Tallwood Venture Capital to obtain the necessary approvals and satisfy all closing conditions for the announced transactions, as well as the inability of Ikanos, after the transactions close, to execute its plan for the combined business, to sell its expanded product lines in light of the current worldwide recession, to reduce and manage total operating costs of the business while continuing to meet product delivery commitments to current and prospective customers, to continue developing products on a schedule that meets customer and market-window requirements and to properly anticipate the future semiconductor product requirements for broadband communications to and through the home, our expectations regarding future profitability; and operational and strategic plans. 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' 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 Six Months Ended -------------------- -------------------- June 28, June 29, June 28, June 29, 2009 2008 2009 2008 --------- --------- --------- --------- Revenue $ 22,429 $ 29,855 $ 43,163 $ 59,552 Cost of revenue 13,139 16,420 25,393 34,053 --------- --------- --------- --------- Gross profit 9,290 13,435 17,770 25,499 --------- --------- --------- --------- Operating expenses: Research and development 9,591 11,571 18,454 23,234 Selling, general and administrative 6,042 6,270 11,680 12,140 Restructuring charges 279 -- 546 -- --------- --------- --------- --------- Total operating expenses 15,912 17,841 30,680 35,374 --------- --------- --------- --------- Loss from operations (6,622) (4,406) (12,910) (9,875) Interest income, net 220 466 457 1,242 --------- --------- --------- --------- Loss before income taxes (6,402) (3,940) (12,453) (8,633) Provision for income taxes 43 33 80 124 --------- --------- --------- --------- Net loss $ (6,445) $ (3,973) $ (12,533) $ (8,757) ========= ========= ========= ========= Basic and diluted net loss per share $ (0.22) $ (0.14) $ (0.43) $ (0.30) ========= ========= ========= ========= Weighted average number of shares 29,397 29,308 29,298 29,426 ========= ========= ========= ========= IKANOS COMMUNICATIONS, INC. Unaudited reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations (In thousands, except per share data) Three Months Ended June 28, 2009 ----------------------------------- As Non-GAAP Reported Adjustments Non-GAAP -------- ----------- -------- Revenue $ 22,429 $ - $ 22,429 Cost of revenue 13,139 (69) (a) 12,382 (688) (b) -------- ----------- -------- Gross profit 9,290 (757) 10,047 -------- ----------- -------- Operating expenses: Research and development 9,591 (687) (a) 8,904 Selling, general and administrative 6,042 (583) (a) 4,106 (372) (b) (981) (d) Restructuring charges 279 (279) (e) - -------- ----------- -------- Total operating expenses 15,912 (2,902) 13,010 -------- ----------- -------- Income (loss) from operations (6,622) 3,659 (2,963) Interest income and other, net 220 - 220 -------- ----------- -------- Income (loss) before income taxes (6,402) 3,659 (2,743) -------- ----------- -------- Provision for income taxes 43 - 43 -------- ----------- -------- Net income (loss) $ (6,445) $ 3,659 $ (2,786) ======== =========== ======== Net income (loss) per shares: Basic $ (0.22) $ (0.09) Diluted $ (0.22) $ (0.09) Weighted average outstanding shares: Basic 29,397 29,397 Diluted 29,397 29,397 Three Months Ended June 29, 2008 ----------------------------------- As Non-GAAP Reported Adjustments Non-GAAP -------- ----------- --------- Revenue $ 29,855 $ - $ 29,855 Cost of revenue 16,420 (118) (a) 14,835 (763) (b) (704) (c) -------- ----------- --------- Gross profit 13,435 (1,585) 15,020 -------- ----------- --------- Operating expenses: Research and development 11,571 (1,471) (a) 9,975 (125) (b) Selling, general and administrative 6,270 (1,029) (a) 4,453 (788) (b) Restructuring charges - - - -------- ----------- --------- Total operating expenses 17,841 (3,413) 14,428 -------- ----------- --------- Income (loss) from operations (4,406) 4,998 592 Interest income and other, net 466 - 466 -------- ----------- --------- Income (loss) before income taxes (3,940) 4,998 1,058 -------- ----------- --------- Provision for income taxes 33 - 33 -------- ----------- --------- Net income (loss) $ (3,973) $ 4,998 $ 1,025 ======== =========== ========= Net income (loss) per shares: Basic $ (0.14) $ 0.03 Diluted $ (0.14) $ 0.03 Weighted average outstanding shares: Basic 29,308 29,308 Diluted 29,308 29,759 Notes: Three Months Ended June 28, June 29, 2009 2008 ----------- --------- (a) Stock-based compensation $ 1,339 $ 2,618 (b) Amortization of acquired intangible assets 1,060 1,676 (c) Fair value adjustment of acquired inventory - 704 (d) Transaction-related expenses 981 - (e) Restructuring charges 279 - ----------- --------- Total non-GAAP adjustments $ 3,659 $ 4,998 =========== ========= IKANOS COMMUNICATIONS, INC. Unaudited reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations (In thousands, except per share data) Six Months Ended June 28, 2009 ------------------------------------- As Non-GAAP Reported Adjustments Non-GAAP --------- ----------- --------- Revenue $ 43,163 $ - $ 43,163 Cost of revenue 25,393 (149) (a) 23,831 (1,413) (b) --------- ----------- --------- Gross profit 17,770 (1,562) 19,332 --------- ----------- --------- Operating expenses: Research and development 18,454 (1,419) (a) 17,035 Selling, general and administrative 11,680 (1,285) (a) 8,240 (743) (b) (1,412) (e) Restructuring charges 546 (546) (f) - --------- ----------- --------- Total operating expenses 30,680 (5,405) 25,275 --------- ----------- --------- Income (loss) from operations (12,910) 6,967 (5,943) Interest income and other, net 457 - 457 --------- ----------- --------- Income (loss) before income taxes (12,453) 6,967 (5,486) --------- ----------- --------- Provision for income taxes 80 - 80 --------- ----------- --------- Net income (loss) $ (12,533) $ 6,967 $ (5,566) ========= =========== ========= Net income (loss) per shares: Basic $ (0.43) $ (0.19) Diluted $ (0.43) $ (0.19) Weighted average outstanding shares: Basic 29,298 29,298 Diluted 29,298 29,298 Six Months Ended June 29, 2008 ------------------------------------- As Non-GAAP Reported Adjustments Non-GAAP --------- ----------- ---------- Revenue $ 59,552 $ - $ 59,552 Cost of revenue 34,053 (237) (a) 30,738 (1,982) (b) (1,096) (c) --------- ----------- ---------- Gross profit 25,499 (3,315) 28,814 --------- ----------- ---------- Operating expenses: Research and development 23,234 (3,042) (a) 19,632 (250) (b) (310) (d) Selling, general and administrative 12,140 (2,154) (a) 8,698 (1,288) (b) Restructuring charges - - - --------- ----------- ---------- Total operating expenses 35,374 (7,044) 28,330 --------- ----------- ---------- Income (loss) from operations (9,875) 10,359 484 Interest income and other, net 1,242 - 1,242 --------- ----------- ---------- Income (loss) before income taxes (8,633) 10,359 1,726 --------- ----------- ---------- Provision for income taxes 124 - 124 --------- ----------- ---------- Net income (loss) $ (8,757) $ 10,359 $ 1,602 ========= =========== ========== Net income (loss) per shares: Basic $ (0.30) $ 0.05 Diluted $ (0.30) $ 0.05 Weighted average outstanding shares: Basic 29,426 29,426 Diluted 29,426 30,731 Notes: Six Months Ended June 28, June 29, 2009 2008 ----------- ---------- (a) Stock-based compensation $ 2,853 $ 5,433 (b) Amortization of acquired intangible assets 2,156 3,520 (c) Fair value adjustment of acquired inventory - 1,096 (d) In-process research and development 310 (e) Transaction-related expenses 1,412 - (f) Restructuring charges 546 - ----------- ---------- Total non-GAAP adjustments $ 6,967 $ 10,359 =========== ========== IKANOS COMMUNICATIONS, INC. Unaudited Condensed Consolidated Balance Sheets (In thousands) June 28, December 28, 2009 2008 Assets Current assets: Cash, cash equivalents and short-term investments $ 59,536 $ 63,339 Accounts receivable, net 8,821 12,360 Inventory 10,885 12,489 Prepaid expenses and other current assets 2,944 1,744 ----------- ------------ Total current assets 82,186 89,932 Long-term investments 1,034 1,034 Property and equipment, net 7,002 9,597 Intangible assets, net 4,135 6,290 Other assets 1,001 580 ----------- ------------ $ 95,358 $ 107,433 =========== ============ Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 4,822 $ 9,237 Accrued liabilities 10,708 8,680 ----------- ------------ Total current liabilities 15,530 17,917 Stockholders' equity 79,828 89,516 ----------- ------------ $ 95,358 $ 107,433 =========== ============
