Science & Technology
Science and Technology
Science and Technology
Thu, February 10, 2011
FREMONT, CA--(Marketwire - February 10, 2011) - Ikanos Communications, Inc. (
Recent Highlights:
- Substantially completed its worldwide restructuring plan
- Increased cash, cash equivalents, and investments to $31 million through underwritten public stock offering and lower operating expenses
- Delivered continued progress on NodeScale™ Vectoring technology
Ikanos Communications, Inc. (
"In the last two quarters, Ikanos made a number of strategic moves to strengthen its financial position and adjust operations to meet our revenue expectations," said John Quigley, CEO and president of Ikanos. "We restructured the Company, began transitioning away from lower-margin products, established a compelling roadmap of differentiated products, and put in place new program management tools and processes to help us better manage expenses and the overall business. All of these elements contributed to our results and non-GAAP profit in the fourth quarter."
Financial Details:
Ikanos reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP), and provides certain supplemental financial information which include the following non-GAAP measures: non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP net income (loss) per share. These non-GAAP measures are calculated by excluding certain items that generally are non-recurring events or are non-cash items including, among others, stock-based compensation, amortization of acquired intangible assets, asset impairments of intangibles and goodwill, and fair value adjustments of acquired inventory. These non-GAAP measures also exclude items which Ikanos' management does not consider in evaluating its on-going business, such as restructuring charges, certain one-time severance expenses, certain prepaid write-offs, and certain expenses resulting from acquisitions such as transaction-related expenses. Ikanos considers the non-GAAP information to be important because it believes it provides better transparency and clarity into Ikanos' operational results and is used by Ikanos' management for that purpose. In addition, investors often use measures such as these to evaluate the financial performance of a company. These non-GAAP measures are presented for supplemental informational purposes only for understanding Ikanos' operating results. These non-GAAP results should not be considered a substitute for cost of revenue, gross profit, operating expenses, net income (loss) or net income (loss) per share presented in accordance with GAAP, and the non-GAAP measures may be different from non-GAAP measures used by other companies.
For a reconciliation of GAAP versus non-GAAP financial information, please see the attached schedules.
Revenue for the fourth quarter of 2010 was $37.1 million compared with revenue of $41.5 million for the third quarter of 2010 and revenue of $58.2 million for the fourth quarter of 2009. Revenue for the year ended January 2, 2011 was $191.7 million compared with the $130.7 million reported for the year ended January 3, 2010.
GAAP operating expenses for the fourth quarter of 2010 were $18.6 million, after deducting a research and development credit of $1.3 million offset by restructuring charges of $0.6 million. The third quarter GAAP operating expenses were $46.4 million, which included an asset impairment charge of $21.4 million for write-downs of goodwill and acquisition-related intangibles and restructuring charges of $3.8 million.
Non-GAAP operating expenses for the fourth quarter of 2010 were $17.4 million, after deducting the research and development credit of $1.3 million. The third quarter non-GAAP operating expenses were $20.2 million.
GAAP net loss for the fourth quarter of 2010 was $(1.4) million, or $(0.02) per share, on 63.0 million weighted average shares. This compares with a net loss of $(33.3) million, or $(0.61) per share, on 54.9 million weighted average shares in the third quarter of 2010 and with a net loss of $(9.1) million, or $(0.17) per share, on 53.9 million weighted average shares in the fourth quarter of 2009.
Non-GAAP net income for the fourth quarter of 2010 was $0.3 million, or $0.01 per diluted share, on 63.8 million weighted average shares. This compares with non-GAAP net loss of $(5.5) million, or $(0.10) per share, in the third quarter of fiscal 2010, and with non-GAAP net income of $1.5 million, or $0.03 per share, in the fourth quarter of 2009.
GAAP net loss for the year ended January 2, 2011 was $(49.8) million, or $(0.88) per share, on 56.7 million weighted average shares. This compares with a net loss of $(37.1) million, or $(0.97) per share, on 38.1 million weighted average shares for the fourth quarter of 2009.
Non-GAAP net loss for the year ended January 2, 2011 was $(9.7) million, or $(0.17) per share, compared with non-GAAP net loss of $(8.5) million, or $(0.22) per share, for the fourth quarter of 2009. Weighted average shares used in computing non-GAAP net loss per share were 56.7 million in 2010 and 38.1 million in 2009.
The 2010 fiscal year-end cash, cash equivalents, and short-term investments increased to $31 million as compared to $27.5 million at fiscal year-end 2009. Additionally, the 2010 fiscal year-end inventory balance decreased to $17 million as compared to $35 million at fiscal year-end 2009, and current liabilities decreased to $23.7 million as compared to $43.7 million, respectively.
Recent Highlights:
- Ikanos filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission on November 1, 2010. Utilizing the registration statement, Ikanos closed an underwritten public offering of its common stock during the fourth quarter. In this offering, Ikanos issued a total of 12.8 million shares of common stock at $1.05 per share. The net proceeds to Ikanos from the sale of shares were approximately $12.5 million net of the underwriting discount and offering expenses.
- On January 7, 2011, Ikanos announced the addition of R. Douglas Norby to its board of directors as a non-executive director. Norby was appointed to the Audit Committee as the designated financial expert and was appointed to the Nominating and Corporate Governance Committee.
- During the fourth quarter of 2010, Ikanos continued to make significant progress on its NodeScale Vectoring product. Ikanos' patent-pending DSL access technology enables customers, such as ZTE Corporation, to achieve performance previously unattainable from service provider networks.
"Ikanos bolstered its financial foundation with an underwritten round of financing in the fourth quarter of 2010, raising $12.5 million," continued Quigley. "We believe these additional funds will provide us with sufficient working capital for ongoing operations, the launch of new central office and customer premises products this year, and the development of next-generation products including our NodeScale Vectoring platform and advanced processors."
Outlook:
- Revenue is forecasted to be between $31.0 million and $34.0 million for the first quarter of 2011.
- GAAP gross margins in the first quarter of 2011 are forecasted to between 46% and 48%. Non-GAAP gross margins are forecasted to be between 47% and 49% in the first quarter of 2011.
- GAAP operating expenses in the first quarter of 2011 are forecasted to be in the range of $20 to $21 million. Non-GAAP operating expenses are forecasted to be in the range of $19 to $20 million in the first quarter of 2011.
Fourth Quarter and Fiscal Year 2010 Conference Call:
Management will review the fourth quarter and fiscal year ended January 2, 2011 financial results and its expectations for subsequent periods at a conference call on February 10, 2011 at 1:30 p.m. Pacific 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 (877) 288-7443 and enter conference ID 37697498. The webcast will be archived and available through February 17, 2011 at [ http://www.ikanos.com/investor/webcasts/ ] or by calling (800) 642-1687 and entering conference ID 37697498.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (
© 2011 Ikanos Communications, Inc. All Rights Reserved. Ikanos Communications, Ikanos, the Ikanos logo, the "Bandwidth Without Boundaries" tagline, Fusiv, Fx, FxS, iQV, Ikanos Velocity and Ikanos NodeScale Vectoring 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 press release contains forward-looking statements that are subject to risks and uncertainties concerning Ikanos Communications, Inc., including statements regarding the benefits of Ikanos' management tools and processes, Ikanos' ability to manage its expenses and overall business, the sufficiency of Ikanos' working capital, its financial outlook, such as Ikanos' expected revenue for the first quarter of 2011, expected gross margins for the first quarter of 2011, expected operating expenses for the first quarter of 2011, and the objectives and anticipated results and benefits of our business strategy, including its product offerings, benefits of its products, its expectations regarding the impact of new advanced products benefits of non-GAAP measures, and statements regarding Ikanos NodeScale Vectoring. 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, macroeconomic conditions which may cause Ikanos' customers to defer purchasing plans, Ikanos' ability to deliver full production releases of its newer products and the acceptance of those products by Ikanos' customers, the continued demand by telecommunications service providers for specific xDSL semiconductor products, the failure of service providers to implement deployment plans on schedule or at all, Ikanos' continued ability to obtain and deliver production volumes of new and current products and technologies, Ikanos' ability to generate demand and close transactions for the sale of its products, Ikanos' ability to develop commercially successful products as a result of its current research and development programs, Ikanos' ability to successfully complete its restructuring plan, 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 Twelve Months Ended ---------------------------------- ---------------------- January 2, October 3, January 3, January 2, January 3, 2011 2010 2010 2011 2010 ---------- ---------- ---------- ---------- ---------- Revenue $ 37,143 $ 41,536 $ 58,191 $ 191,677 $ 130,688 Cost of revenue 20,223 28,575 40,590 126,692 85,019 ---------- ---------- ---------- ---------- ---------- Gross profit 16,920 12,961 17,601 64,985 45,669 ---------- ---------- ---------- ---------- ---------- Operating expenses: Research and development 12,796 14,757 18,061 60,769 49,805 Selling, general and administrative 5,294 6,467 9,679 27,239 30,974 Asset impairments - 21,378 - 21,378 2,460 Restructuring charges 554 3,757 290 5,794 1,338 ---------- ---------- ---------- ---------- ---------- Total operating expenses 18,644 46,359 28,030 115,180 84,577 ---------- ---------- ---------- ---------- ---------- Loss from operations (1,724) (33,398) (10,429) (50,195) (38,908) Investment gain - - 1,238 - 1,238 Interest income, net (12) 8 124 51 727 ---------- ---------- ---------- ---------- ---------- Loss before income taxes (1,736) (33,390) (9,067) (50,144) (36,943) Provision (benefit) for income taxes (362) (129) 47 (381) 158 ---------- ---------- ---------- ---------- ---------- Net loss $ (1,374) $ (33,261) $ (9,114) $ (49,763) $ (37,101) ========== ========== ========== ========== ========== Basic and diluted net loss per share $ (0.02) $ (0.61) $ (0.17) $ (0.88) $ (0.97) ========== ========== ========== ========== ========== Weighted average number of shares 63,025 54,904 53,883 56,713 38,098 ========== ========== ========== ========== ========== IKANOS COMMUNICATIONS, INC. Unaudited reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations (In thousands, except per share data) Three Months Ended January 2, 2011 --------------------------------------- Non-GAAP As Reported Adjustments Non-GAAP ----------- ----------- ----------- Revenue $ 37,143 $ - $ 37,143 Cost of revenue 20,223 (20)(a) 19,703 (500)(b) - ----------- ----------- ----------- Gross profit 16,920 (520) 17,440 ----------- ----------- ----------- Operating expenses: Research and development 12,796 (285)(a) 12,511 Selling, general and administrative 5,294 (235)(a) 4,934 (125)(b) Restructuring charges 554 (554)(d) - ----------- ----------- ----------- Total operating expenses 18,644 (1,199) 17,445 ----------- ----------- ----------- Loss from operations (1,724) 1,719 (5) Investment gain - - - Interest income and other, net (12) - (12) ----------- ----------- ----------- Loss before income taxes (1,736) 1,719 (17) Provision (benefit) for income taxes (362) - (362) ----------- ----------- ----------- Net income (loss) $ (1,374) $ 1,719 $ 345 =========== =========== =========== Net loss per shares: Basic and diluted $ (0.02) $ 0.01 Diluted $ (0.02) $ 0.01 Weighted average outstanding shares: Basic 63,025 63,025 Diluted 63,025 63,792 Three Months Ended January 3, 2010 --------------------------------------- Non-GAAP As Reported Adjustments Non-GAAP ----------- ----------- ----------- Revenue $ 58,191 $ - $ 58,191 Cost of revenue 40,590 (104)(a) 32,693 (1,803)(b) (5,990)(c) ----------- ----------- ----------- Gross profit 17,601 (7,897) 25,498 ----------- ----------- ----------- Operating expenses: Research and development 18,061 (947)(a) 17,114 Selling, general and administrative 9,679 (449)(a) 6,924 (2,306)(b) Restructuring charges 290 (290)(d) - ----------- ----------- ----------- Total operating expenses 28,030 (3,992) 24,038 ----------- ----------- ----------- Loss from operations (10,429) 11,889 1,460 Investment gain 1,238 (1,238)(e) - Interest income and other, net 124 - 124 ----------- ----------- ----------- Loss before income taxes (9,067) 10,651 1,584 Provision (benefit) for income taxes 47 - 47 ----------- ----------- ----------- Net income (loss) $ (9,114) $ 10,651 $ 1,537 =========== =========== =========== Net loss per shares: Basic and diluted $ (0.17) $ 0.03 Diluted $ (0.17) $ 0.03 Weighted average outstanding shares: Basic 53,883 53,883 Diluted 53,883 56,058 Notes: Three Months Ended January 2, January 3, 2011 2010 ----------- ----------- (a) Stock-based compensation $ 540 $ 1,500 (b) Amortization of acquired intangible assets 625 4,109 (c) Fair-value adjustment of acquired inventory - 5,990 (d) Restructuring charges 554 290 (e) Gain of sale of securities - (1,238) ----------- ----------- Total non-GAAP adjustments $ 1,719 $ 10,651 =========== =========== IKANOS COMMUNICATIONS, INC. Unaudited reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations (In thousands, except per share data) Three Months Ended October 3, 2010 --------------------------------------- Non-GAAP As Reported Adjustments Non-GAAP ----------- ----------- ----------- Revenue $ 41,536 $ - $ 41,536 Cost of revenue 28,575 (24)(a) 26,989 (910)(b) (652)(c) ----------- ----------- ----------- Gross profit 12,961 (1,586) 14,547 ----------- ----------- ----------- Operating expenses: Research and development 14,757 (273)(a) 14,484 Selling, general and administrative 6,467 (168)(a) 5,667 (632)(b) Asset impairments 21,378 (21,378)(d) - Restructuring charges 3,757 (3,757)(e) - ----------- ----------- ----------- Total operating expenses 46,359 (26,208) 20,151 ----------- ----------- ----------- Loss from operations (33,398) 27,794 (5,604) Interest income and other, net 8 - 8 ----------- ----------- ----------- Loss before income taxes (33,390) 27,794 (5,596) Benefit for income taxes (129) - (129) ----------- ----------- ----------- Net loss $ (33,261) $ 27,794 $ (5,467) =========== =========== =========== Basic and diluted net loss per share $ (0.61) $ (0.10) Basic and diluted weighted average shares outstanding 54,904 54,904 Notes: October 3, 2010 ----------- (a) Stock-based compensation $ 465 (b) Amortization of acquired intangible assets 1,542 (c) Prepaid royalty write-off 652 (d) Impairments of intangibles and goodwill 21,378 (e) Restructuring 3,757 ----------- Total non-GAAP adjustments $ 27,794 =========== IKANOS COMMUNICATIONS, INC. Unaudited reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations (In thousands, except per share data) Twelve Months Ended January 2, 2011 --------------------------------------- Non-GAAP As Reported Adjustments Non-GAAP ----------- ----------- ----------- Revenue $ 191,677 $ - $ 191,677 Cost of revenue 126,692 (106)(a) 120,451 (3,986)(b) (1,497)(c) (652)(d) ----------- ----------- ----------- Gross profit 64,985 (6,241) 71,226 ----------- ----------- ----------- Operating expenses: Research and development 60,769 (1,684)(a) 59,085 Selling, general and administrative 27,239 (1,480)(a) 22,252 (2,527)(b) (980)(f) Asset impairments 21,378 (21,378)(g) - Restructuring charges 5,794 (5,794)(h) - ----------- ----------- ----------- Total operating expenses 115,180 (33,843) 81,337 ----------- ----------- ----------- Loss from operations (50,195) 40,084 (10,111) Investment gain - - - Interest income and other, net 51 - 51 ----------- ----------- ----------- Loss before income taxes (50,144) 40,084 (10,060) Provision (benefit) for income taxes (381) - (381) ----------- ----------- ----------- Net loss $ (49,763) $ 40,084 $ (9,679) =========== =========== =========== Net loss per shares: Basic and diluted $ (0.88) $ (0.17) Weighted average outstanding shares: Basic and diluted 56,713 56,713 Twelve Months Ended January 3, 2010 --------------------------------------- Non-GAAP As 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)(e) Selling, general and administrative 30,974 (2,346)(a) 20,707 (3,932)(b) (3,989)(e) Asset impairments 2,460 (2,460)(g) - Restructuring charges 1,338 (1,338)(h) - ----------- ----------- ----------- Total operating expenses 84,577 (17,776) 66,801 ----------- ----------- ----------- Loss from operations (38,908) 29,845 (9,063) Investment gain 1,238 (1,238)(i) - Interest income and other, net 727 - 727 ----------- ----------- ----------- Loss before income taxes (36,943) 28,607 (8,336) Provision (benefit) for income taxes 158 - 158 ----------- ----------- ----------- Net loss $ (37,101) $ 28,607 $ (8,494) =========== =========== =========== Net loss per shares: Basic and diluted $ (0.97) $ (0.22) Weighted average outstanding shares: Basic and diluted 38,098 38,098 Notes: Twelve Months Ended January 2, January 3, 2011 2010 ----------- ----------- (a) Stock-based compensation $ 3,270 $ 5,920 (b) Amortization of acquired intangible assets 6,513 8,207 (c) Fair value adjustment of acquired inventory 1,497 7,481 (d) Prepaid royalty write-off 652 - (e) Transaction-related expenses - 4,439 (f) Certain one-time severance 980 - (g) Impairments of intangibles and goodwill 21,378 2,460 (h) Restructuring charges 5,794 1,338 (i) Investment gain - (1,238) ----------- ----------- Total non-GAAP adjustments $ 40,084 $ 28,607 =========== =========== IKANOS COMMUNICATIONS, INC. Unaudited Condensed Consolidated Balance Sheets (In thousands) January 2, January 3, 2011 2010 ---------- ---------- Assets Current assets: Cash, cash equivalents and short-term investments $ 30,950 $ 27,540 Accounts receivable, net 24,147 34,995 Inventory 17,046 35,050 Prepaid expenses and other current assets 2,096 2,155 ---------- ---------- Total current assets 74,239 99,740 Property and equipment, net 8,214 7,502 Intangible assets, net 6,102 25,359 Goodwill - 8,633 Other assets 1,142 1,766 ---------- ---------- $ 89,697 $ 143,000 ========== ========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 10,401 $ 26,641 Accrued liabilities 13,297 17,050 ---------- ---------- Total current liabilities 23,698 43,691 Other liabilities 478 2,193 ---------- ---------- Total liabilities 24,176 45,884 Stockholders' equity 65,521 97,116 ---------- ---------- $ 89,697 $ 143,000 ========== ==========
