(Source: MARKETWIRE)
Ikanos Communications, Inc. (NASDAQ: IKAN), a leading provider of
advanced broadband semiconductor and software products for the
digital home, today reported its financial results for the third
quarter ended September 27, 2009.
"During the third quarter, we successfully completed a number of
strategic initiatives including the Conexant Broadband Access
acquisition, a strategic alliance with ASSIA Inc., and the
introduction of Ikanos Velocity(TM), the industry's lowest power
high-performance A/VDSL central office chipset," said Michael Gulett,
president and CEO at Ikanos. "These accomplishments strengthen our
ability to compete in our core broadband DSL market. In addition, we
are pleased with the growth in our communications processor business
which accounted for approximately 25 percent of revenue in the most
recent quarter."
Financial Highlights:
Revenue for the third quarter of 2009 was $29.3 million compared with
revenue of $22.4 million for the second quarter of 2009 and revenue
of $24.2 million for the year ago period.
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, asset impairments, investment impairments, one
time severance expenses, 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.
GAAP net loss for the third quarter of 2009 was $15.5 million, or
$0.40 per share, on 38.8 million weighted average shares. This
compares with a net loss of $6.4 million, or $0.22 per share, on 29.4
million weighted average shares in the second quarter of 2009 and
with a net loss of $26.7 million, or $0.93 per share, on 28.6 million
weighted average shares in the third quarter of 2008.
Non-GAAP net loss for the third quarter of 2009 was $4.5 million, or
$0.12 per share, on 38.8 million weighted average shares. This
compares with non-GAAP net loss of $2.8 million, or $0.09 per share,
in the second quarter of fiscal 2009, and with a non-GAAP net loss of
$2.2 million, or $0.08 per share, in the third quarter of 2008.
Revenue for the nine months ended September 27, 2009 was $72.5
million compared with the $83.7 million reported for the nine months
ended September 28, 2008.
GAAP net loss for the nine months ended September 27, 2009 was $28.0
million, or $0.86 per share, on 32.5 million weighted average shares.
This compares with a net loss of $35.4 million, or $1.22 per share, on
29.1 million weighted average shares for the year ago period.
Non-GAAP net loss for the nine months ended September 27, 2009 was
$10.0 million, or $0.31 per share, compared with non-GAAP net loss of
$0.6 million, or $0.02 per share, for the year ago period. Weighted
average shares used in computing non-GAAP net loss per share were 32.5
million in 2009 and 29.1 million in 2008.
Recent Highlights:
-- Ikanos completed the acquisition of the Broadband Access product line
from Conexant Systems, Inc. Under the terms of the agreement, Ikanos
purchased Conexant's Broadband Access product line for approximately $53
million in cash, excluding transaction costs, and the assumption of certain
employee and facility related liabilities. Simultaneously, Ikanos received
an investment of $42 million, excluding transaction-related expenses, from
Tallwood Venture Capital.
-- Ikanos introduced its Ikanos Velocity(TM) family of low-power, full-
featured VDSL access chipsets. These robust, high-density central office
(CO) devices provide up to 100 Mbps symmetric bandwidth and operate at sub
1 Watt per port -- the lowest power consumption of any A/VDSL device on the
market. And the Ikanos Velocity chipsets are the first CO A/VDSL
semiconductor devices compliant with European Code of Conduct (CoC) power
consumption standards. The Velocity chipsets also include proprietary
Ikanos Quality Video (iQV(TM)) technology, which provides exceptional
delivery of data-intensive triple play applications, including multi-
channel high-definition IPTV, high-speed data transmission, video on demand
(VoD) and voice over Internet Protocol (VoIP).
-- Ikanos announced a strategic relationship with ASSIA Inc., a leading
provider of Dynamic Spectrum Management (DSM) technology. Under terms of
the agreement, Ikanos receives a license to ASSIA's essential DSM patents
and certain know how for the development of vectored DSL products -- also
known as DSM Level 3 or G. Vector -- capable of delivering speeds of 100
Mbps and greater over existing copper loops. In addition, the two companies
will co-market each others' products to the network equipment and service
provider industries.
-- Ikanos announced that it has joined forces with DSP Group, Inc(TM) to
demonstrate a reference design for a multi-service residential gateway with
fully integrated Digital Enhanced Cordless Telecommunications (DECT)
capabilities. The DECT/CAT-iq Module from DSP Group, combined with Ikanos'
Fusiv(R) Vx180 integrated gateway processor, is designed to enable network
equipment manufacturers to quickly bring to market a platform that supports
cordless telephony as a part of a residential gateway offering.
Outlook:
-- Revenue is expected to be between $55.0 million and $58.0 million for
the fourth quarter of 2009.
-- Non-GAAP gross margins are expected to be between 44% and 46% in the
fourth quarter of 2009. GAAP gross margins in the fourth quarter of 2009
will be lower than non-GAAP gross margins, as they will include
amortization of acquisition-related intangibles of approximately $2.0
million, amortization of the fair-value of acquired inventory of
approximately $6.0 to $7.5 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 $25.0
to $26.0 million in the fourth quarter of 2009. GAAP operating expenses in
the fourth quarter of 2009 will be higher than non-GAAP operating expenses,
as they will include amortization of acquisition-related intangibles of
$1.9 million and charges related to stock-based compensation expense in
accordance with FAS 123(R) of $1.5 to $2.0 million.
Third Quarter Fiscal Year 2009 Conference Call:
Management will review the third quarter 2009 financial results and
its expectations for subsequent periods at a conference call on
October 27, 2009 at 1:30 p.m. Pacific Time. To listen to the call and
view the accompanying presentation, 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
36682987. The webcast will be archived and available through November
2, 2009 at http://www.ikanos.com/investor/webcasts/ or by calling
706-645-9291 and enter pass code 36682987.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (NASDAQ: IKAN) is a leading provider of
advanced broadband semiconductor and software products for the
digital home. The company's broadband DSL, communications processors
and other offerings power access infrastructure and customer premises
equipment for many of the world's leading network equipment
manufacturers and telecommunications service providers. For more
information, visit www.ikanos.com.
Copyright 2009 Ikanos Communications, Inc. All Rights Reserved.
Ikanos Communications, Ikanos, the Ikanos logo, the Bandwidth without
boundaries tagline, Fusiv, Fx, and FxS, iQV and Ikanos Velocity 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 fourth quarter of
2009, expected gross margins for the fourth quarter of 2009, expected
operating expenses for the fourth quarter of 2009, and our ability to
compete in the broadband DSL market. 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 legacy Ikanos and BBA businesses, 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 obtain and deliver production volumes of new and current
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. 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 Nine Months Ended
-------------------- --------------------
September September September September
27, 2009 28, 2008 27, 2009 28, 2008
--------- --------- --------- ---------
Revenue $ 29,334 $ 24,178 $ 72,497 $ 83,730
Cost of revenue 19,036 14,212 44,429 48,265
--------- --------- --------- ---------
Gross profit 10,298 9,966 28,068 35,465
--------- --------- --------- ---------
Operating expenses:
Research and development 13,290 10,282 31,744 33,516
Selling, general and
administrative 9,615 8,142 21,295 20,282
Asset impairments 2,460 12,496 2,460 12,496
Restructuring charges 502 - 1,048 -
--------- --------- --------- ---------
Total operating expenses 25,867 30,920 56,547 66,294
--------- --------- --------- ---------
Loss from operations (15,569) (20,954) (28,479) (30,829)
Investment impairment - (6,166) - (6,166)
Interest income, net 146 427 603 1,669
--------- --------- --------- ---------
Loss before income taxes (15,423) (26,693) (27,876) (35,326)
Provision for (benefit from)
income taxes 31 (27) 111 97
--------- --------- --------- ---------
Net loss $ (15,454) $ (26,666) $ (27,987) $ (35,423)
========= ========= ========= =========
Basic and diluted net loss per
share $ (0.40) $ (0.93) $ (0.86) $ (1.22)
========= ========= ========= =========
Weighted average number of
shares 38,802 28,565 32,466 29,139
========= ========= ========= =========
IKANOS COMMUNICATIONS, INC.
Unaudited reconciliation of GAAP to Non-GAAP Condensed
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
September 27, 2009
-------------------------------------------------------------
As Non-GAAP Non-GAAP Non-GAAP
Reported Adjustments Non-GAAP BBA Ikanos
---------- ----------- ---------- ---------- ----------
Revenue $ 29,334 $ - $ 29,334 $ 5,204 $ 24,130
Cost of
revenue 19,036 (60)(a) 16,426 3,184 13,242
- (1,059)(b) - - -
- (1,491)(d) - - -
---------- ---------- ---------- ---------- ----------
Gross
profit 10,298 (2,610) 12,908 2,020 10,888
---------- ---------- ---------- ---------- ----------
Operating
expenses:
Research and
development 13,290 (895)(a) 11,945 4,020 7,925
- - - - -
- (450)(h) - - -
Selling,
general
and admin-
istrative 9,615 (612)(a) 5,543 946 4,597
- (883)(b) - - -
- (2,577)(h) - - -
Asset
impairments 2,460 (2,460)(e) - - -
Restructuring
charges 502 (502)(f) - - -
---------- ---------- ---------- ---------- ----------
Total
operating
expenses 25,867 (8,379) 17,488 4,966 12,522
---------- ---------- ---------- ---------- ----------
Loss from
operations (15,569) 10,989 (4,580) (2,946) (1,634)
Investment
impairment - - - - -
Interest
income
and other,
net 146 - 146 - 146
---------- ---------- ---------- ---------- ----------
Loss before
income
taxes (15,423) 10,989 (4,434) (2,946) (1,488)
---------- ---------- ---------- ---------- ----------
Provision
for (benefit
from) income
taxes 31 - 31 - 31
---------- ---------- ---------- ---------- ----------
Net loss $ (15,454) $ 10,989 $ (4,465) $ (2,946) $ (1,519)
========== ========== ========== ========== ==========
Net loss per
share:
Basic and
diluted $ (0.40) $ (0.12)
Weighted
average
outstanding
shares:
Basic and
diluted 38,802 38,802
Three Months Ended
September 28, 2008
-------------------------------------
As Non-GAAP
Reported Adjustments Non-GAAP
---------- ----------- ----------
Revenue $ 24,178 $ - $ 24,178
Cost of
revenue 14,212 7 (a) 13,090
- (762)(b) -
- (367)(d) -
---------- ---------- ----------
Gross
profit 9,966 (1,122) 11,088
---------- ---------- ----------
Operating
expenses:
Research and
development 10,282 (1,185)(a) 8,870
- (125)(b) -
- (102)(c) -
Selling,
general
and admin-
istrative 8,142 (2,035)(a) 4,864
- (611)(b) -
- (632)(c) -
Asset
impairments 12,496 (12,496)(e) -
Restructuring
charges - - -
---------- ---------- ----------
Total
operating
expenses 30,920 (17,186) 13,734
---------- ---------- ----------
Loss from
operations (20,954) 18,308 (2,646)
Investment
impairment (6,166) 6,166 (g) -
Interest
income
and other,
net 427 - 427
---------- ---------- ----------
Loss before
income
taxes (26,693) 24,474 (2,219)
---------- ---------- ----------
Provision
for (benefit
from) income
taxes (27) - (27)
---------- ---------- ----------
Net loss $ (26,666) $ 24,474 $ (2,192)
========== ========== ==========
Net loss per
share:
Basic and
diluted $ (0.93) $ (0.08)
Weighted
average
outstanding
shares:
Basic and
diluted 28,565 28,565
Notes: Three Months Ended
September September
27, 2009 28, 2008
---------- ----------
(a) Stock-based
compensation $ 1,567 $ 3,213
(b) Amortization of
acquired intangible
assets 1,942 1,498
(c) Severance - 734
(d) Fair-value adjustment
of acquired inventory 1,491 367
(e) Impairments of assets
and in-process R&D 2,460 12,496
(f) Restructuring charges 502 -
(g) Investment impairment - 6,166
(h) Transaction-related
expenses 3,027 -
---------- ----------
Total non-GAAP
adjustments $ 10,989 $ 24,474
========== ==========
IKANOS COMMUNICATIONS, INC.
Unaudited reconciliation of GAAP to Non-GAAP Condensed
Consolidated Statements of Operations
(In thousands, except per share data)
Nine Months Ended
September 27, 2009
-------------------------------------
As Non-GAAP
Reported Adjustments Non-GAAP
---------- ----------- ----------
Revenue $ 72,497 $ - $ 72,497
Cost of revenue 44,429 (209)(a) 40,257
- (2,472)(b) -
- (1,491)(d) -
---------- ---------- ----------
Gross profit 28,068 (4,172) 32,240
---------- ---------- ----------
Operating expenses:
Research and development 31,744 (2,314)(a) 28,980
- (450)(h) -
- - -
- - -
Selling, general and
administrative 21,295 (1,897)(a) 13,783
- (1,626)(b) -
- (3,989)(h) -
Asset impairments 2,460 (2,460)(f) -
Restructuring charges 1,048 (1,048)(e) -
---------- ---------- ----------
Total operating expenses 56,547 (13,784) 42,763
---------- ---------- ----------
Loss from operations (28,479) 17,956 (10,523)
Investment impairment - - -
Interest income and other, net 603 - 603
---------- ---------- ----------
Loss before income taxes (27,876) 17,956 (9,920)
---------- ---------- ----------
Provision for income taxes 111 - 111
---------- ---------- ----------
Net loss $ (27,987) $ 17,956 $ (10,031)
========== ========== ==========
Net loss per share:
Basic and diluted $ (0.86) $ (0.31)
Weighted average outstanding shares:
Basic and diluted 32,466 32,466
Nine Months Ended
September 28, 2008
-------------------------------------
As Non-GAAP
Reported Adjustments Non-GAAP
---------- ----------- ----------
Revenue $ 83,730 $ - $ 83,730
Cost of revenue 48,265 (230)(a) 43,828
- (2,744)(b) -
- (1,463)(d) -
---------- ---------- ----------
Gross profit 35,465 (4,437) 39,902
---------- ---------- ----------
Operating expenses:
Research and development 33,516 (4,227)(a) 28,502
- (375)(b) -
- (102)(c) -
- (310)(f) -
Selling, general and
administrative 20,282 (4,189)(a) 13,562
- (1,899)(b) -
- (632)(c) -
Asset impairments 12,496 (12,496)(f) -
Restructuring charges - - -
---------- ---------- ----------
Total operating expenses 66,294 (24,230) 42,064
---------- ---------- ----------
Loss from operations (30,829) 28,667 (2,162)
Investment impairment (6,166) 6,166 (g) -
Interest income and other, net 1,669 - 1,669
---------- ---------- ----------
Loss before income taxes (35,326) 34,833 (493)
---------- ---------- ----------
Provision for income taxes 97 - 97
---------- ---------- ----------
Net loss $ (35,423) $ 34,833 $ (590)
========== ========== ==========
Net loss per share:
Basic and diluted $ (1.22) $ (0.02)
Weighted average outstanding shares:
Basic and diluted 29,139 29,139
Notes: Nine Months Ended
September September
27, 2009 28, 2008
---------- ----------
(a) Stock-based compensation $ 4,420 $ 8,646
(b) Amortization of acquired intangible assets 4,098 5,018
(c) Severance - 734
(d) Fair-value adjustment of acquired inventory 1,491 1,463
(e) Restructuring charges 1,048 -
(f) Impairments of assets and in-process R&D 2,460 12,806
(g) Investment impairment - 6,166
(h) Transaction-related expenses 3,989 -
---------- ----------
Total non-GAAP adjustments $ 17,506 $ 34,833
========== ==========
IKANOS COMMUNICATIONS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
September 27, December 28,
2009 2008
------------ ------------
Assets
Current assets:
Cash, cash equivalents and short-term
investments $ 37,833 $ 63,339
Accounts receivable, net 17,888 12,360
Inventory 34,532 12,489
Prepaid expenses and other current assets 2,555 1,744
------------ ------------
Total current assets 92,808 89,932
Long-term investments 1,034 1,034
Property and equipment, net 8,033 9,597
Intangible assets, net 29,468 6,290
Goodwill 8,633 -
Other assets 1,145 580
------------ ------------
$ 141,121 $ 107,433
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 17,521 $ 9,237
Accrued liabilities 15,594 8,680
------------ ------------
Total current liabilities 33,115 17,917
Other liabilities 3,448 -
------------ ------------
Total liabilities 36,563 17,917
Stockholders' equity 104,558 89,516
------------ ------------
$ 141,121 $ 107,433
============ ============
Contacts
Investor Relations
Bonnie Mott
Ikanos Communications
510-438-5360
Email Contact
Media Relations
Margo Westfall
Ikanos Communications
510-438-6276
Email Contact
SOURCE: Ikanos Communications
A service of YellowBrix, Inc.
