FREMONT, Calif., May 12 /PRNewswire-FirstCall/ -- CentilliumCommunications, Inc. (Nasdaq: CTLM), a leading provider of highly innovativecommunications processing technology, today announced financial results forthe first quarter ended March 31, 2008.
Net revenues for the first quarter of 2008 were $6.1 million, comparedwith $8.6 million during the fourth quarter of 2007 and $10.6 million duringthe first quarter of 2007.
The GAAP gross margin was 56.7 percent (56.7 percent, non-GAAP) for thefirst quarter of 2008, compared with 168 percent (64.4 percent, non-GAAP) forthe fourth quarter of 2007 and 52.1 percent (52.2 percent, non-GAAP) for thefirst quarter of 2007. Further information about non-GAAP measures is providedbelow.
Net income was $0.5 million on a GAAP basis, or $0.01 per share, for thefirst quarter of 2008, compared with net income of $2.4 million, or $0.06 pershare, for the fourth quarter of 2007 and a net loss of $5.9 million, or $0.14per share, for the first quarter of 2007. The GAAP net income for the firstquarter of 2008 included an $8.1 million benefit from the gain on sale of ourDSL related assets and restructuring expense of $2.3 million. The GAAP resultsfor all periods include charges for stock-based compensation due to theadoption of SFAS 123R, effective Jan. 1, 2006.
Non-GAAP results were a net loss of $5.0 million, or a net loss of $0.12per share, for the first quarter of 2008, compared with a net loss of $4.2million, or a net loss of $0.10 per share, for the fourth quarter of 2007 anda net loss of $5.3 million, or $0.13 per share, for the first quarter of 2007.The non-GAAP results for the first quarter excludes the effect of the $8.1million gain on sale of our DSL related assets; restructuring expense of $2.3million; and stock-based compensation of $277,000. The non-GAAP results forthe fourth quarter of 2007 exclude the effect of the $8.9 million benefit fromthe reversal of accrued royalties; restructuring expense related to surplusspace of $518,000; stock-based compensation of $336,000; and a $1.4 millionimpairment of assets charge related to the sale of our DSL related assets.The non-GAAP results for the first quarter of 2007 exclude stock-basedcompensation of $587,000.
Total cash, short-term investments and restricted cash were $41.7 millionat March 31, 2008, compared with $36.8 million at Dec. 31, 2007. Therestricted cash included in the $41.7 million was $1.8 million at March 31,2008.
'During the first quarter, we took significant steps to restructure ourbusiness,' said Faraj Aalaei, co-founder and CEO. 'Our operating expensereduction measures will generate substantial savings beginning in the thirdquarter of 2008, and we are excited about the expected growth from our twobusinesses, Voice-over-Internet Protocol (VoIP) and Optical.'
Conference Call Information
A conference call to review the first quarter 2008 financial results willfollow this press release today at 2:00 p.m. Pacific time/5:00 p.m. Easterntime. To listen to the call, please dial (210) 839-8948, passcode: Centillium.A replay will be made available approximately one hour after the conclusion ofthe call and will remain available for approximately one week. To access thereplay, dial (203) 369-1682. The conference call will also be web cast overthe Internet; visit the Investor Relations section of the CentilliumCommunications website at http://www.centillium.com to access the call fromthe website. This web cast will be recorded and available for replay on theCentillium website from approximately two hours after the conclusion of theconference call until June 30, 2008.
Non-GAAP Financial Measures
In this earnings press release and during the earnings conference call andwebcast as described above, Centillium has supplemented and will supplementits reported GAAP financials with non-GAAP measures. Non-GAAP gross margin,operating expenses, net loss and net loss per share, where applicable, excludethe effect of stock-based compensation and, with respect to the three monthsended Dec. 31, 2008, restructuring expense and the gain on sale of our DSLrelated assets; and with respect to the three months ended Dec. 31, 2007, theeffect of the reversal of accrued royalties, an impairment of assets chargerelated to the sale of our DSL related assets and restructuring expense. Thecompany uses the non-GAAP information internally to evaluate its continuingoperational performance and its cash requirements and to determine incentivecompensation, and believes these non-GAAP measures are useful to investors asthey provide additional insight into the underlying operating results and thecompany's cash requirements and its ongoing performance in the ordinary courseof its operations. However, non-GAAP measures are not stated in accordancewith, should not be considered in isolation from and are not a substitute forGAAP measures, and our non-GAAP measures may be different from similarlytitled non-GAAP measures reported by other companies.
