(Source: MARKETWIRE)
Atheros Communications, Inc. (NASDAQ: ATHR), a global leader in
innovative technologies for wireless and wired communications, today
announced its unaudited financial results for its third quarter ended
Sept. 30, 2009.
Revenue in the third quarter was a record $156.6 million, up 40
percent from the $112.2 million reported in the second quarter of 2009
and 13 percent higher than the $138.1 million reported in the third
quarter of 2008.
In accordance with U.S. generally accepted accounting principles
(GAAP), the company recorded third quarter GAAP net income of $38.6
million or $0.60 per diluted share. This compares with a GAAP net
loss of $0.3 million or $0.00 per diluted share in the second quarter
of 2009. GAAP net income in the third quarter of 2008 was $10.1
million or $0.16 per diluted share. Cash, cash equivalents and
short-term marketable securities were $382.8 million at Sept. 30,
2009, up from $340.6 million in the prior quarter. Cash flow from
operations for the first three quarters of 2009 was $79.5 million.
Atheros reports gross margins, operating expenses, operating income
(loss), net income (loss) and basic and diluted net income (loss) per
share in accordance with GAAP and additionally on a non-GAAP basis.
Non-GAAP net income excludes, where applicable, the effect of
stock-based compensation, amortization of acquired intangible assets
and acquisition-related charges, the other-than-temporary impairment
of long-term investments and the tax impact of these excluded items,
as well as a benefit from the favorable settlement of a foreign tax
liability and the benefit from a change in state tax filing position.
A reconciliation of preliminary GAAP net income (loss) to non-GAAP
net income, as well as a description of items excluded in the
calculation of non-GAAP net income is presented in the financial
statements portion of this release.
Non-GAAP gross margins in the third quarter were 48.4 percent,
compared to 47.4 percent reported in the second quarter of 2009, and
49.4 percent in the third quarter of 2008. Non-GAAP operating income
in the third quarter of 2009 was 19.4 percent of revenue, compared to
10.8 percent in the second quarter of 2009 and 17.7 percent in the
third quarter of 2008.
Non-GAAP net income in the third quarter was $29.3 million or $0.46
per diluted share, compared with $12.3 million or $0.20 per diluted
share in the second quarter of 2009 and $23.4 million or $0.37 per
diluted share in the third quarter of 2008.
"While the economic environment worldwide continues to be
challenging, the strength of our product cycles and the increasing
diversification of our business enabled us to achieve record top and
bottom-line results this quarter," said Dr. Craig Barratt, Atheros'
president and chief executive officer. "We were particularly
successful in our PC OEM and Consumer channels as our Align(TM),
ETHOS(TM) and ROCm(R) solutions continued to be adopted by a growing
number of customers. Our strategy of building a diversified
communications company is paying dividends, and we believe our
pending acquisition of Intellon will further broaden our
communications solutions portfolio," Dr. Barratt said.
Recent Highlights
-- Oct. 19: Atheros ships over 10 million Align 1-stream 11n chips;
milestone highlights the fastest chip adoption in the company's
history;
-- Oct. 14: Atheros endorses the Wi-Fi Certified(TM) Wi-Fi Direct
Specification; Atheros Direct Connect(TM), first demonstrated the
benefits of device-to-device connectivity at the 2008 International
Consumer Electronics Show (CES) and is now shipping in mobile consumer
products;
-- Oct. 12: Atheros ROCm technology rocks wireless in Microsoft's new
Zune HD portable media player with industry's most power-efficient
Wi-Fi Solution that enables Zune HD to stream up to 14 hours of music
between battery charges;
-- Oct. 5: Atheros builds on the success of its industry-leading
XSPAN(R) 11n family with the industry's most integrated 2-stream 11n
solutions, the AR9287 PCIe and the AR9227 PCI, which deliver
no-compromise, full MIMO transmit and receive performance;
-- Sept. 30: The Wi-Fi Alliance began product testing for its Wi-Fi
CERTIFIED n program, updating its two-year-old Wi-Fi CERTIFIED
802.11n draft 2.0 program, and announced that Atheros XSPAN Dual-band
2.4/5GHz PCIe MiniCard for Computing Designs and XSPAN Dual-band,
Dual-concurrent Gigabit Reference Platform for AP/Routers are among
the first products to be Wi-Fi CERTIFIED n in the new testing program
and will be used in its interoperability test bed;
-- Sept. 15: Atheros innovates again in the Netbook PC market with
the industry's first 1-stream 11n and Bluetooth(R) combo solution; and
-- Sept. 8: Atheros announces plans to Acquire Intellon Corporation,
another significant step by Atheros toward its goal of enabling the
very best connectivity experiences across the networking, computing
and mobile device markets.
Conference Call
Atheros will broadcast its third quarter financial results conference
call today, Monday, Oct. 19, 2009 at 2 p.m. Pacific Time (5 p.m.
Eastern Time).
To listen to the call from within the United States, please dial
877-835-9268 approximately 10 minutes prior to the start of the call.
To listen to the call from outside the United States, please dial
706-634-9690 approximately 10 minutes prior to the start of the call.
The pass code is Atheros. A taped replay will be made available
approximately one hour after the conclusion of the call and will
remain available for one week after the live call. To access the
replay, please dial 706-645-9291 and use the pass code 32287070.
Atheros' financial results conference call will be available via a
live webcast on the investor relations section of the Atheros web site
at http://www.atheros.com. Access the web site 15 minutes prior to the
start of the call to download and install any necessary audio
software. An archived webcast replay will be available on the web
site for 6 months.
About Atheros Communications, Inc.
Atheros Communications is a global leader in innovative technologies
for wireless and wired communications products. Atheros combines its
wireless and networking systems expertise with high-performance radio
frequency (RF), mixed signal and digital semiconductor design skills
to provide highly integrated chipsets that are manufactured on
low-cost, standard complementary metal-oxide semiconductor (CMOS)
processes. Atheros technology is used by a broad base of leading
customers, including personal computer, networking equipment and
consumer device manufacturers. For more information, please visit
http://www.atheros.com or send an email to info@atheros.com.
NOTE: Atheros, the Atheros logo, XSPAN, Align, ETHOS, ROCm and
Atheros Direct Connect, are trademarks of Atheros Communications, Inc.
All other trademarks mentioned in this document are the sole property
of their respective owners.
NOTE ON FORWARD-LOOKING STATEMENTS:
Except for the historical information contained herein, the matters
set forth in this press release, including our statements regarding
our strategy, the expected benefits of our acquisition of Intellon and
the benefit of using non-GAAP financial measures are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ
materially, including, but not limited to, difficulties in the
development of new and enhanced products, general economic
conditions, the effects of competition and technological change,
risks associated with the Company's planned acquisition of Intellon,
including but not limited to the integration of Intellon into Atheros
and market expansion opportunities for Atheros, and the risks
detailed in Atheros' Annual Report on Form 10-K for the year ended
December 31, 2008 and its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2009, as filed with the Securities and
Exchange Commission, and in other reports filed with the SEC by
Atheros from time to time. These forward-looking statements speak
only as of the date hereof. Atheros disclaims any obligation to
update these forward-looking statements.
Important Additional Information and Where You Can Find It
In connection with the proposed acquisition of Intellon Corporation,
Atheros has filed a Registration Statement on Form S-4 containing a
proxy statement/prospectus and other documents concerning the proposed
acquisition with the Securities and Exchange Commission (the SEC).
Investors and security holders are urged to read the proxy
statement/prospectus and any amendments thereto when they become
available and other relevant documents filed with the SEC regarding
the proposed transaction because they will contain important
information. Investors and security holders may obtain a free copy of
the proxy statement/prospectus, as amended (when it is available),
and other documents filed by Atheros and Intellon with the SEC at the
SEC's web site at http://www.sec.gov. The proxy statement/prospectus,
as amended (when available), and other documents filed with the SEC
may also be obtained for free by contacting Atheros Investor
Relations by e-mail at ir@atheros.com or by telephone at (408)
830-5672 or by contacting Intellon Investor Relations by e-mail at
suzanne@blueshirtgroup.com or by telephone at (415) 217-7722.
Atheros, Intellon, and their respective directors, executive
officers, certain members of management and certain employees may be
deemed to be participants in the solicitation of proxies in
connection with the proposed transaction. Additional information
concerning Atheros' directors and executive officers is set forth in
Atheros' Proxy Statement for its 2009 Annual Meeting of Stockholders,
which was filed with the SEC on April 6, 2009. Additional information
concerning Intellon's directors and executive officers is set forth
in Intellon's Proxy Statement for its 2009 Annual Meeting of
Stockholders, which was filed with the SEC on April 28, 2009. These
documents are available free of charge at the SEC's web site at
www.sec.gov or by going to, respectively, Atheros' Investors page on
its corporate website at www.atheros.com and Intellon's Investor
Relations page on its corporate website at www.intellon.com.
Additional information regarding the persons who may, under the rules
of the SEC, be deemed participants in the solicitation of proxies in
connection with the proposed transaction, and a description of their
direct and indirect interests in the proposed transaction, which may
differ from the interests of Atheros or Intellon stockholders
generally will be set forth in the proxy statement/prospectus when it
is filed with the SEC.
ATHEROS COMMUNICATIONS, INC.
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
-------------------------------------
September 30, June 30, September 30,
2009 2009 2008
----------- ----------- -----------
Net revenue $ 156,641 $ 112,224 $ 138,064
Cost of goods sold 81,047 59,181 69,939
----------- ----------- -----------
Gross profit 75,594 53,043 68,125
Operating expenses:
Research and development 32,619 30,480 30,859
Sales and marketing 14,872 14,305 13,471
General and administrative 8,178 6,872 7,034
Amortization of acquired intangible
assets 2,580 2,885 2,927
Acquisition-related charges 977 - -
----------- ----------- -----------
Total operating expenses 59,226 54,542 54,291
Income (loss) from operations 16,368 (1,499) 13,834
Interest income, net 1,351 1,563 2,354
Impairment of long-term investments (874) (30) (4,385)
Income tax benefit (provision) 21,731 (284) (1,715)
----------- ----------- -----------
Net income (loss) $ 38,576 $ (250) $ 10,088
=========== =========== ===========
Basic earnings (loss) per share $ 0.62 $ 0.00 $ 0.17
=========== =========== ===========
Diluted earnings (loss) per share $ 0.60 $ 0.00 $ 0.16
=========== =========== ===========
Shares used in computing basic
earnings (loss) per share 62,111 61,427 60,146
=========== =========== ===========
Shares used in computing diluted
earnings (loss) per share 64,215 61,427 62,624
=========== =========== ===========
ATHEROS COMMUNICATIONS, INC.
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Nine Months Ended
September 30,
------------------------
2009 2008
----------- -----------
Net revenue $ 356,790 $ 374,100
Cost of goods sold 186,072 186,458
----------- -----------
Gross profit 170,718 187,642
Operating expenses:
Research and development 92,144 90,860
Sales and marketing 42,593 37,913
General and administrative 20,980 19,337
Amortization of acquired intangible assets 8,350 9,346
Acquisition-related charges 977 -
----------- -----------
Total operating expenses 165,044 157,456
Income from operations 5,674 30,186
Interest income, net 4,585 6,718
Impairment of long-term investments (2,011) (10,842)
Income tax benefit (provision) 22,526 (2,432)
----------- -----------
Net income $ 30,774 $ 23,630
=========== ===========
Basic earnings per share $ 0.50 $ 0.40
=========== ===========
Diluted earnings per share $ 0.49 $ 0.38
=========== ===========
Shares used in computing basic earnings per share 61,485 59,554
=========== ===========
Shares used in computing diluted earnings per
share 63,162 62,062
=========== ===========
ATHEROS COMMUNICATIONS, INC.
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
September 30, December 31,
2009 2008
------------ ------------
ASSETS
Current assets:
Cash, cash equivalents and marketable securities $ 382,830 $ 293,758
Accounts receivable, net 61,336 58,385
Inventory 43,178 69,813
Deferred income taxes and other current assets 21,987 15,889
------------ ------------
Total current assets 509,331 437,845
Property and equipment, net 11,923 14,789
Long-term investments 16,486 16,963
Goodwill and net acquired intangible assets 115,817 124,992
Deferred income taxes and other assets 22,595 21,119
------------ ------------
$ 676,152 $ 615,708
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 103,444 $ 96,001
Deferred income taxes and other long-term
liabilities 28,265 48,229
Stockholders' equity 544,443 471,478
------------ ------------
$ 676,152 $ 615,708
============ ============
ATHEROS COMMUNICATIONS, INC.
RECONCILIATION OF PRELIMINARY NON-GAAP ADJUSTMENTS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
----------------------------------------
September 30, June 30, September 30,
2009 2009 2008
------------ ------------ ------------
GAAP net income (loss) $ 38,576 $ (250) $ 10,088
Stock-based compensation:
Cost of goods sold 178 186 145
Research and development 5,040 5,148 4,058
Sales and marketing 3,206 3,392 2,145
General and administrative 1,981 2,012 1,260
------------ ------------ ------------
Total stock-based
compensation 10,405 10,738 7,608
Acquisition-related charges:
Amortization of acquired
intangible assets 2,580 2,885 2,927
Other acquisition-related charges 977 - 3
Impairment of long-term
investments 874 30 4,385
Tax-related items:
Tax benefit from favorable
settlement of foreign tax
liability (21,706) - -
Net tax effect of non-GAAP
adjustments (2,401) (1,065) (1,648)
------------ ------------ ------------
Non-GAAP net income $ 29,305 $ 12,338 $ 23,363
============ ============ ============
Shares used in computing non-GAAP
basic earnings per share 62,111 61,427 60,146
============ ============ ============
Shares used in computing non-GAAP
diluted earnings per share 64,215 63,021 62,624
============ ============ ============
Non-GAAP basic earnings per share $ 0.47 $ 0.20 $ 0.39
============ ============ ============
Non-GAAP diluted earnings per
share $ 0.46 $ 0.20 $ 0.37
============ ============ ============
ATHEROS COMMUNICATIONS, INC.
RECONCILIATION OF PRELIMINARY NON-GAAP ADJUSTMENTS
(Unaudited)
(In thousands, except per share data)
Nine Months Ended
September 30,
--------------------------
2009 2008
------------ ------------
GAAP net income $ 30,774 $ 23,630
Stock-based compensation:
Cost of goods sold 537 441
Research and development 14,804 11,636
Sales and marketing 9,440 6,038
General and administrative 5,515 3,439
------------ ------------
Total stock-based compensation 30,296 21,554
Acquisition-related charges:
Amortization of acquired intangible assets 8,350 9,346
Other acquisition-related charges 977 945
Impairment of long-term investments 2,011 10,842
Tax-related items:
Tax benefit from favorable settlement of
foreign tax liability (21,706) -
Tax benefit from change in state tax filing
position - (1,068)
Net tax effect of non-GAAP adjustments (5,175) (5,436)
------------ ------------
Non-GAAP net income $ 45,527 $ 59,813
============ ============
Shares used in computing non-GAAP basic
earnings per share 61,485 59,554
============ ============
Shares used in computing non-GAAP diluted
earnings per share 63,162 62,062
============ ============
Non-GAAP basic earnings per share $ 0.74 $ 1.00
============ ============
Non-GAAP diluted earnings per share $ 0.72 $ 0.96
============ ============
ATHEROS COMMUNICATIONS, INC.
RECONCILIATION OF PRELIMINARY GAAP TO NON-GAAP FINANCIAL MEASURES
To supplement our unaudited selected financial data presented on a
basis consistent with Generally Accepted Accounting Principles, or
GAAP, we disclose certain non-GAAP financial measures, including
non-GAAP gross profit, operating expenses, operating income, net
income and basic and diluted earnings per share. These supplemental
measures exclude stock-based compensation, acquisition-related
charges, other-than-temporary impairments of long-term investments, a
tax benefit resulting from a change in state tax filing position, a
tax benefit resulting from the favorable settlement of a foreign tax
liability and any tax detriment or benefit between the income tax
expense with and without the non-GAAP measures. These non-GAAP
measures are not in accordance with, nor serve as an alternative for
GAAP. We believe that these non-GAAP measures have limitations in that
they do not reflect all of the amounts associated with our GAAP
results of operations. These non-GAAP measures should only be viewed
in conjunction with corresponding GAAP measures. We compensate for
the limitations of non-GAAP financial measures by relying upon GAAP
results to gain a complete picture of our performance.
In calculating non-GAAP financial measures, we exclude certain items
to facilitate a review of the comparability of our core operating
performance on a period-to-period basis. The excluded items represent
stock-based compensation and charges and gains that are primarily
driven by discrete events that we do not consider to be directly
related to core operating performance. We use non-GAAP measures to
evaluate the core operating performance of our business, for
comparison with forecasts and strategic plans, for calculating return
on investment and for benchmarking performance externally against
competitors. In addition, management's incentive compensation is
determined using these non-GAAP measures. Also, when evaluating
potential acquisitions, we primarily consider the impact of the
target's performance and valuation on our non-GAAP measures. Since we
find these measures to be useful, we believe that investors benefit
from seeing results reviewed by management in addition to seeing GAAP
results. We believe that these non-GAAP measures, when read in
conjunction with our GAAP financials, provide useful information to
investors by offering:
-- more meaningful comparability of our on-going operating results;
-- the ability to better identify trends in our underlying business; and
-- a way to compare our operating results against analyst financial
models and operating results of competitors that supplement their GAAP
results with non-GAAP financial measures.
The following are explanations of each type of adjustment that we
incorporate into non-GAAP financial measures:
Stock-based compensation expense relates to equity awards granted to
our workforce. Our stock incentive plans are important components of
our employee incentive compensation arrangements and are reflected as
expenses in our GAAP results. While we include the dilutive impact of
such equity awards in weighted average shares outstanding, the
expense associated with stock-based awards is excluded from non-GAAP
net income. These non-cash charges are not factored into our internal
evaluation of net income as we believe their inclusion would hinder
our ability to assess core operational performance.
Acquisition-related charges include the amortization of acquired
intangible assets primarily consisting of acquired technology,
customer relationships, covenants not to compete, step-up of
inventory to its estimated fair value, backlog, cash earn outs and
transaction costs related to our pending acquisition of Intellon
Corporation. These charges are not factored into our evaluation of
potential acquisitions, or of our performance after completion of
acquisitions, because they are generally non-cash and are not related
to our core operating performance, and the frequency and amount of
such charges vary significantly based on the timing and magnitude of
our acquisition transactions, the then fair market value of our common
stock and the maturities of the businesses being acquired.
Impairment of long-term investments relates primarily to the
other-than-temporary, non-operating write down of our investments in
auction rate securities rated AA and AAA at the date of purchase. The
liquidity and fair value of these securities has been impacted by the
failure of these markets and the exposure of these securities to the
financial condition of bond insurance companies. We have determined
that certain of these assets have been other-than-temporarily impaired
and therefore they were written down to their estimated fair value.
These charges are not factored into our internal evaluation of net
income as we believe they are non-operating charges that do not
impact our core operating performance.
Adjustment for taxes relates to the tax effect of various adjustments
that we incorporate into non-GAAP measures in order to provide a more
meaningful measure of non-GAAP net income. In addition, the tax
benefit from the favorable settlement of a foreign tax liability in
the third quarter of 2009 and the tax benefit resulting from a change
in a state tax filing position in the second quarter of 2008 have
been excluded. We believe that these adjustments provide us with the
ability to more clearly view trends in our core operating
performance.
Reconciliations of non-GAAP measures disclosed in this press release
are set forth below (in thousands, except percentages):
Three Months Ended
----------------------------------------
September 30, June 30, September 30,
2009 2009 2008
------------ ----------- ------------
GAAP gross profit $ 75,594 $ 53,043 $ 68,125
Stock-based compensation 178 186 145
------------ ----------- ------------
Non-GAAP gross profit $ 75,772 $ 53,229 $ 68,270
============ =========== ============
GAAP gross profit as a % of
revenue 48.3% 47.3% 49.3%
Stock-based compensation 0.1% 0.1% 0.1%
------------ ----------- ------------
Non-GAAP gross profit as a % of
revenue 48.4% 47.4% 49.4%
============ =========== ============
GAAP operating expense $ 59,226 $ 54,542 $ 54,291
Stock-based compensation (10,227) (10,552) (7,463)
Amortization of acquired
intangible assets (2,580) (2,885) (2,927)
Acquisition-related charges (977) - (3)
------------ ----------- ------------
Non-GAAP operating expenses $ 45,442 $ 41,105 $ 43,898
============ =========== ============
GAAP income (loss) from
operations $ 16,368 $ (1,499) $ 13,834
Stock-based compensation 10,405 10,738 7,608
Amortization of acquired
intangible assets 2,580 2,885 2,927
Acquisition-related charges 977 - 3
------------ ----------- ------------
Non-GAAP income from operations $ 30,330 $ 12,124 $ 24,372
============ =========== ============
GAAP income (loss) from
operations as a % of revenue 10.4% (1.3)% 10.0%
Stock-based compensation 6.7% 9.5% 5.5%
Amortization of acquired
intangible assets 1.7% 2.6% 2.2%
Acquisition-related charges 0.6% -% -%
------------ ----------- ------------
Non-GAAP income from operations
as a % of revenue 19.4% 10.8% 17.7%
============ =========== ============
Reconciliations of non-GAAP measures disclosed in this press release
are set forth below (in thousands, except percentages):
Nine Months Ended
--------------------------
September 30, September 30,
2009 2008
------------ ------------
GAAP gross profit $ 170,718 $ 187,642
Stock-based compensation 537 441
Amortization of acquisition-related step-up
value of inventory - 572
------------ ------------
Non-GAAP gross profit $ 171,255 $ 188,655
============ ============
GAAP gross profit as a % of revenue 47.8% 50.2%
Stock-based compensation 0.2% 0.1%
Amortization of acquisition-related step-up
value of inventory -% 0.1%
------------ ------------
Non-GAAP gross profit as a % of revenue 48.0% 50.4%
============ ============
GAAP operating expense $ 165,044 $ 157,456
Stock-based compensation (29,759) (21,113)
Amortization of acquired intangible assets (8,350) (9,346)
Acquisition-related charges (977) (373)
------------ ------------
Non-GAAP operating expenses $ 125,958 $ 126,624
============ ============
GAAP income from operations $ 5,674 $ 30,186
Stock-based compensation 30,296 21,554
Amortization of acquired intangible assets 8,350 9,346
Acquisition-related charges 977 373
Amortization of acquisition-related step-up
value of inventory - 572
------------ ------------
Non-GAAP income from operations $ 45,297 $ 62,031
============ ============
GAAP income from operations as a % of revenue 1.6% 8.1%
Stock-based compensation 8.5% 5.8%
Amortization of acquired intangible assets 2.3% 2.5%
Acquisition-related charges 0.3% 0.1%
Amortization of acquisition-related step-up
value of inventory -% 0.1%
------------ ------------
Non-GAAP income from operations as a % of
revenue 12.7% 16.6%
============ ============
Analyst Contact:
Jack Lazar
Atheros Communications
408-773-5200
jack.lazar@atheros.com
Investor Contact:
David H. Allen
Atheros Communications
408-830-5762
david.allen@atheros.com
Press Contact:
Dakota Lee
Atheros Communications
408-720-5597
dakota.lee@atheros.com
Greg Wood
A&R Edelman
650-762-2838
gwood@ar-edelman.com
SOURCE: Atheros
A service of YellowBrix, Inc.
