SAN JOSE, Calif., Oct. 26, 2011 /PRNewswire/ -- Symmetricom®, Inc.
(NASDAQ: SYMM), a worldwide leader in precision time and frequency
technologies, today reported financial results for its first
quarter of fiscal year 2012 ended October 2,
2011.
(Logo:
http://photos.prnewswire.com/prnh/20110829/AQ59077LOGO)
Net revenue for the first quarter of fiscal 2012 was
$56.4 million, up $2.0 million, or 3.7%, compared to the first
quarter of fiscal 2011, driven by higher shipments of cable timing
products and solid performance in the government programs business.
Symmetricom reported income from continuing operations of
$2.7 million, or $0.06 per share, for the first quarter of fiscal
2012, compared to income from continuing operations of $3.1 million, or $0.07 per share, in the first quarter of fiscal
2011.
Non-GAAP income from continuing operations for the first quarter
of fiscal 2012 was $4.1 million, or
$0.10 per share, compared to
$5.6 million, or $0.13 per share, reported for the first quarter
of the prior year.
Cash, cash equivalents and short-term investments totaled
$57.0 million as of October 2, 2011, a decrease of $6.7 million from the $63.7 million reported as of July 3, 2011, reflecting a significant reduction
in payables associated with a higher level of inventory receipts at
the end of fiscal 2011 and approximately $2
million in stock repurchases during the first quarter of
fiscal 2012. Net cash used in operating activities in the
first quarter was $4.1 million and
property, plant and equipment purchases were approximately
$1.0 million, resulting in free cash
outflow of approximately $5.1
million.
"Symmetricom had a strong start to fiscal 2012, delivering solid
revenue growth and profitability in-line with our expectations.
Demand for our critical timing solutions remained solid, with
strong orders in a number of categories and increased backlog in
the quarter," said Dave Cote,
president and chief executive officer of Symmetricom. "We are
benefiting from long-term client relationships in our
Communications business and remain a leader in the expanding packet
synchronization market; our PackeTime™ equipment is now deployed in
more than 100 live networks around the world. With an
extensive product set, we are well-positioned to capitalize upon
the migration to next generation networks. Our Government and
Enterprise business had another solid quarter, with revenues up 7%
year-over-year driven by our government programs and solutions for
space, defense and avionics. In addition, we see great
potential for our Quantum™ Chip Scale Atomic Clock and its many
potential market applications. We are executing on our
strategic initiatives and are focused on profitable growth.
The critical nature of our solutions, our customer and
geographic diversity, and our broadening pool of verticals position
us well for fiscal 2012 and beyond."
Business Results
Revenue in the Communications Business in the first quarter of
fiscal 2012 was $33.6 million,
compared to $33.1 million reported in
the same period last year. Revenue in the Government and
Enterprise Business in the first quarter of fiscal 2012 was
$22.8 million, compared to
$21.2 million reported in the same
period last year. Symmetricom has changed the name of this
business to Government and Enterprise to more accurately reflect
the expansion of the business' customers and initiatives. The
unit is managing the company's growing enterprise vertical and
leading the push into new commercial markets such as
high-performance computing, oil and gas exploration, and the power
utility market.
Second Quarter 2012 Guidance
Symmetricom's guidance for the second quarter of fiscal 2012 is
as follows:
- Net revenue is expected to be in the range of $54 million to $60 million
- GAAP earnings per share from continuing operations is expected
to be in the range of $0.01 to
$0.07
- Non-GAAP earnings per share from continuing operations is
expected to be in the range of $0.07 to
$0.12
A reconciliation of GAAP and non-GAAP guidance is provided at
the end of this press release.
Investor Conference Call
As previously announced, management will hold a conference call
to discuss these results today, at 1:30 p.m.
Pacific Time. Investors are invited to join the
conference call by dialing +1-312-470-0071 and referencing
"Symmetricom." A live webcast will also be available on the
investor relations section of the company's website at
http://www.symmetricom.com. An audio replay will be available
for one week and can be accessed by dialing +1-402-220-6538.
About Symmetricom, Inc.
Symmetricom (NASDAQ:SYMM), a world leader in precise time
solutions, sets the world's standard for time. The company
generates, distributes and applies precise time for the
communications, aerospace/defense, IT infrastructure and metrology
industries. Symmetricom's customers, from communications
service providers and network equipment manufacturers to
governments and their suppliers worldwide, are able to build more
reliable networks and systems by using the company's advanced
timing technologies, atomic clocks, services and solutions.
All products support today's precise timing standards,
including GPS-based timing, IEEE 1588 (PTP), Network Time Protocol
(NTP), Synchronous Ethernet and DOCSIS® timing. Symmetricom
is based in San Jose, California,
with offices worldwide. For more information, visit:
http://www.symmetricom.com.
Non-GAAP Information
Certain non-GAAP financial information is included in this press
release. In the reconciliation of GAAP to non-GAAP results,
Symmetricom excludes certain items related to non-cash equity-based
compensation, amortization of purchased technology and intangible
assets, restructuring charges, and non-cash income tax expenses for
valuation allowances against deferred tax assets that the company
does not consider indicative of its ongoing performance. The
income tax effect after these non-GAAP adjustments is determined
based upon Symmetricom's estimate of its annual non-GAAP effective
tax rate excluding these non-GAAP adjustments. Symmetricom
believes that excluding such items provides investors, analysts and
management with a representation of the Company's core operating
performance and with information useful in assessing, in
conjunction with GAAP results, underlying trends in operating
performance. Management uses such non-GAAP information to
evaluate financial results and to establish operational goals.
Non-GAAP information should not be considered superior to or
as a substitute for data prepared in accordance with GAAP. A
reconciliation of the non-GAAP results to the GAAP results is
provided in the financial schedules portion of this press
release.
Free cash flow is defined as net cash provided by or used in
operating activities minus purchases of property, plant and
equipment. Symmetricom believes this metric provides useful
information to its investors, analysts, and management about the
level of cash generated by or used in normal business operations,
including the use of cash for the purchase of property, plant and
equipment. Management also views it as a measure of cash
available to pay debt and return cash to stockholders. Free
cash flow is not a GAAP financial measure and should not be
considered superior to or a substitute for operating cash flow or
other cash flow data prepared in accordance with GAAP.
Safe Harbor
This press release contains forward-looking information within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and is subject to the safe harbor created by those
sections. These forward-looking statements include statements
concerning second quarter fiscal 2012 guidance and future
performance, expectations regarding contributions of new products,
a positive operational and financial outlook for fiscal 2012, our
positioning to capitalize upon the migration to next generation
networks, the potential for our Quantum™ Chip Scale Atomic Clock,
our strategic initiatives and focus on profitable growth as well as
the information regarding the usefulness of the non-GAAP financial
information. The statements in this press release are made as
of the date of this press release, even if subsequently made
available by Symmetricom on its website or otherwise.
Symmetricom expressly disclaims any obligation to update or
revise any forward-looking statement contained herein, whether as a
result of a change in its expectations, a change in any events,
conditions or circumstances on which a forward-looking statement is
based, or otherwise. Symmetricom's actual results could
differ materially from those projected or suggested in these
forward-looking statements. Factors that could cause future
actual results to differ materially from the results projected in
or suggested by such forward-looking statements include: but are
not limited to, risks relating to general economic conditions in
the markets we address and the telecommunications market in
general, risks related to the development of our new products and
services, reliance on our contract manufacturer for the
manufacturing previously carried out at our Puerto Rico facility and by other third party
vendors, the effects of increasing competition and competitive
pricing pressure, uncertainties associated with changing
intellectual property laws, developments in and expenses related to
litigation, the inability to obtain sufficient amounts of key
components, the rescheduling or cancellation of key customer
orders, the loss of a key customer, the effects of new and emerging
technologies, the risk that excess inventory may result in
write-offs, price erosion and decreased demand, fluctuations in the
rate of exchange of foreign currency, changes in our effective tax
rate, market acceptance of our new products and services,
technological advancements, undetected errors or defects in our
products, the risks associated with our international sales,
potential short-term investment losses and other risks due to
credit market dislocation, geopolitical risks and risk of terrorist
activities, the risks associated with attempting to integrate other
companies and businesses we acquire, and the risk factors listed
from time to time in Symmetricom's reports filed with the
Securities and Exchange Commission, including the annual report on
Form 10-K for the fiscal year ended July 3,
2011 and subsequent Form 8-K's.
SYMM-F
|
SYMMETRICOM,
INC.
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
(In
thousands, except per share amounts)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
October
2,
|
|
July
3,
|
|
September
26,
|
|
|
|
|
|
2011
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
$ 56,378
|
|
$ 60,689
|
|
$
54,379
|
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
Cost of products
and services
|
|
|
29,830
|
|
31,384
|
|
26,606
|
|
|
Amortization of
purchased technology
|
|
|
186
|
|
260
|
|
287
|
|
|
Restructuring
charges
|
|
|
417
|
|
364
|
|
3,747
|
|
|
Total cost of sales
|
|
|
30,433
|
|
32,008
|
|
30,640
|
|
|
Gross profit
|
|
|
25,945
|
|
28,681
|
|
23,739
|
|
|
Gross margin
|
|
|
46.0%
|
|
47.3%
|
|
43.7%
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
6,898
|
|
6,984
|
|
6,606
|
|
|
Selling, general
and administrative
|
|
|
14,810
|
|
16,620
|
|
12,799
|
|
|
Amortization of
intangible assets
|
|
|
52
|
|
60
|
|
62
|
|
|
Restructuring
charges
|
|
|
96
|
|
691
|
|
(881)
|
|
|
Total operating expenses
|
|
|
21,856
|
|
24,355
|
|
18,586
|
|
|
Operating income
|
|
|
4,089
|
|
4,326
|
|
5,153
|
|
|
Interest income, net of
amortization (accretion) of premium (discount) on
investments
|
|
|
66
|
|
294
|
|
(108)
|
|
|
Interest expense
|
|
|
-
|
|
(3)
|
|
(55)
|
|
|
Income from
continuing operations before taxes
|
|
|
4,155
|
|
4,617
|
|
4,990
|
|
|
Income tax provision
|
|
|
1,406
|
|
6,051
|
|
1,896
|
|
|
Income (loss) from
continuing operations
|
|
|
2,749
|
|
(1,434)
|
|
3,094
|
|
|
Income from discontinued
operations, net of tax
|
|
|
-
|
|
157
|
|
127
|
|
|
Net income
(loss)
|
|
|
$ 2,749
|
|
$ (1,277)
|
|
$
3,221
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share -
basic:
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
|
$
0.06
|
|
$ (0.03)
|
|
$
0.07
|
|
|
Income from
discontinued operations
|
|
|
-
|
|
-
|
|
-
|
|
|
Net income (loss)
|
|
|
$
0.06
|
|
$ (0.03)
|
|
$
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - basic
|
|
|
42,687
|
|
42,897
|
|
43,430
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share -
diluted:
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
|
$
0.06
|
|
$ (0.03)
|
|
$
0.07
|
|
|
Income from
discontinued operations
|
|
|
-
|
|
-
|
|
-
|
|
|
Net income (loss)
|
|
|
$
0.06
|
|
$ (0.03)
|
|
$
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - diluted
|
|
|
43,294
|
|
42,897
|
|
43,772
|
|
|
|
|
|
|
|
|
|
|
SYMMETRICOM,
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In
thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
2,
|
|
July
3,
|
|
|
|
|
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$ 27,593
|
|
$ 20,318
|
|
|
Short-term
investments
|
|
|
|
29,425
|
|
43,340
|
|
|
Accounts receivable,
net
|
|
|
|
35,078
|
|
40,511
|
|
|
Inventories
|
|
|
|
64,612
|
|
62,622
|
|
|
Prepaids and other current
assets
|
|
|
15,834
|
|
14,004
|
|
|
Total current
assets
|
|
|
|
172,542
|
|
180,795
|
|
Property, plant and equipment,
net
|
|
|
22,935
|
|
23,255
|
|
Intangible assets,
net
|
|
|
|
2,192
|
|
2,429
|
|
Deferred taxes and other
assets
|
|
|
|
27,938
|
|
29,361
|
|
|
Total assets
|
|
|
|
$ 225,607
|
|
$ 235,840
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$ 8,672
|
|
$ 16,113
|
|
|
Accrued compensation
|
|
|
|
11,844
|
|
13,743
|
|
|
Accrued warranty
|
|
|
|
1,477
|
|
1,601
|
|
|
Other accrued
liabilities
|
|
|
|
11,896
|
|
14,683
|
|
|
Total current
liabilities
|
|
|
|
33,889
|
|
46,140
|
|
Long-term obligations
|
|
|
|
4,938
|
|
5,212
|
|
Deferred income taxes
|
|
|
|
334
|
|
334
|
|
|
Total
liabilities
|
|
|
|
39,161
|
|
51,686
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
200,827
|
|
201,002
|
|
|
Accumulated other comprehensive
loss
|
|
|
(311)
|
|
(29)
|
|
|
Accumulated deficit
|
|
|
|
(14,070)
|
|
(16,819)
|
|
|
Total
stockholders' equity
|
|
|
|
186,446
|
|
184,154
|
|
|
Total liabilities and stockholders' equity
|
|
|
$ 225,607
|
|
$ 235,840
|
|
|
|
|
|
|
|
|
|
|
SYMMETRICOM,
INC.
|
|
|
RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
|
|
|
(In
thousands, except per share amounts)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
October
2,
|
|
July
3,
|
|
September
26,
|
|
|
|
2011
|
|
2011
|
|
2010
|
|
|
Reconciliation from GAAP to
Non-GAAP
|
|
|
|
|
|
|
|
GAAP Income (loss) from
continuing operations
|
$ 2,749
|
|
$ (1,434)
|
|
$
3,094
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
Equity-based compensation
expense:
|
|
|
|
|
|
|
|
Cost of products
and services
|
$
119
|
|
296
|
|
23
|
|
|
Research and
development
|
289
|
|
308
|
|
138
|
|
|
Selling, general
and administrative
|
755
|
|
1,190
|
|
291
|
|
|
Total equity-based compensation
expense
|
1,163
|
|
1,794
|
|
452
|
|
|
|
|
|
|
|
|
|
|
Amortization of purchased
technology and intangible assets:
|
|
|
|
|
|
|
|
Cost of products
and services
|
186
|
|
260
|
|
287
|
|
|
Operating
expenses
|
52
|
|
60
|
|
62
|
|
|
Total amortization of purchased
technology and intangible assets
|
238
|
|
320
|
|
349
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
513
|
|
1,055
|
|
2,866
|
|
|
Valuation allowance on Ca
R&D tax credits
|
-
|
|
4,476
|
|
-
|
|
|
Income tax effect of Non-GAAP
adjustments
|
(536)
|
|
(772)
|
|
(1,177)
|
|
|
Non-GAAP income from continuing
operations
|
$ 4,127
|
|
$ 5,439
|
|
$
5,584
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share -
diluted:
|
|
|
|
|
|
|
|
GAAP income (loss)
from continuing operations
|
$
0.06
|
|
$ (0.03)
|
|
$
0.07
|
|
|
Non-GAAP income
from continuing operations
|
$
0.10
|
|
$ 0.12
|
|
$
0.13
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - diluted
|
43,294
|
|
43,562
|
|
43,772
|
|
|
|
|
|
|
|
|
|
|
SYMMETRICOM,
INC.
|
|
|
|
RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
|
|
|
|
(In
thousands, except per share amounts)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
October
2,
|
|
July
3,
|
|
September
26,
|
|
|
|
|
|
2011
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net revenue
|
|
$ 56,378
|
|
$ 60,689
|
|
$
54,379
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from GAAP to
Non-GAAP Gross Profit:
|
|
|
|
|
|
|
|
|
GAAP Gross profit
|
(A)
|
$ 25,945
|
|
$ 28,681
|
|
$
23,739
|
|
|
|
GAAP Gross margin
|
|
46.0%
|
|
47.3%
|
|
43.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
Equity-based compensation
expense
|
|
119
|
|
296
|
|
23
|
|
|
|
Amortization of purchased
technology
|
|
186
|
|
260
|
|
287
|
|
|
|
Restructuring charges
|
|
417
|
|
364
|
|
3,747
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross profit
|
(B)
|
$ 26,667
|
|
$ 29,601
|
|
$
27,796
|
|
|
|
Non-GAAP Gross margin
|
|
47.3%
|
|
48.8%
|
|
51.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from GAAP to
Non-GAAP Operating Expense:
|
|
|
|
|
|
|
|
|
GAAP Operating
expenses
|
(C)
|
$ 21,856
|
|
$ 24,355
|
|
$
18,586
|
|
|
|
Operating expense % to
revenue
|
|
38.8%
|
|
40.1%
|
|
34.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
Equity-based compensation
expense
|
|
(1,044)
|
|
(1,498)
|
|
(429)
|
|
|
|
Amortization of intangible
assets
|
|
(52)
|
|
(60)
|
|
(62)
|
|
|
|
Restructuring charges
|
|
(96)
|
|
(691)
|
|
881
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
expenses
|
(D)
|
$ 20,664
|
|
$ 22,106
|
|
$
18,976
|
|
|
|
Non-GAAP operating expenses % to
revenue
|
|
36.7%
|
|
36.4%
|
|
34.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from GAAP to
Non-GAAP Operating Income from continuing operations:
|
|
|
|
|
|
|
|
|
GAAP Operating income
|
(A) - (C)
|
$ 4,089
|
|
$ 4,326
|
|
$
5,153
|
|
|
|
Operating income % to
revenue
|
|
7.3%
|
|
7.1%
|
|
9.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating
income
|
(B) - (D)
|
$ 6,003
|
|
$ 7,495
|
|
$
8,820
|
|
|
|
Operating income % to
revenue
|
|
10.6%
|
|
12.3%
|
|
16.2%
|
|
|
|
|
|
|
|
|
|
|
|
SYMMETRICOM,
INC.
|
|
|
RECONCILIATION OF
FORWARD-LOOKING GUIDANCE FOR GAAP REVENUE AND EPS
|
|
|
TO NON-GAAP
GUIDANCE FOR REVENUE AND EPS
|
|
|
(In
thousands, except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ending
January 1, 2012
|
|
|
|
|
Revenue
|
|
Earnings Per
Share from
Continuing Operations
|
|
|
|
|
From
|
To
|
|
From
|
To
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Guidance
|
$ 54,000
|
$ 60,000
|
|
$ 0.01
|
$ 0.07
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
Equity-based compensation
expense
|
|
|
|
0.05
|
0.04
|
|
|
|
Amortization of purchased
technology and intangible assets
|
|
|
|
0.01
|
0.01
|
|
|
|
Restructuring charges
|
|
|
|
0.03
|
0.02
|
|
|
|
Income tax effect of non-GAAP
adjustments
|
|
|
|
(0.03)
|
(0.02)
|
|
|
|
Total
Non-GAAP Adjustments
|
-
|
-
|
|
0.06
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Guidance
|
$ 54,000
|
$ 60,000
|
|
$ 0.07
|
$ 0.12
|
|
|
|
|
|
|
|
|
|
SOURCE Symmetricom, Inc.