UTStarcom Releases First Quarter 2006 Financial Results
ALAMEDA, Calif., June 21 /PRNewswire-FirstCall/ -- UTStarcom, Inc.
(Nasdaq: UTSI), a global leader in IP-based, end-to-end networking solutions
and services, today reported financial results for the first quarter of 2006.
First Quarter Revenues of $596.6 Million, Gross Margins of 20.5%, and Loss per Share of ($0.09)
Positive Cash Flow From Operations of Approximately $54 Million in the First Quarter
Net sales for the first quarter of 2006 were
margins for the first quarter were 20.5% and GAAP net loss for the quarter was
'While there is still a lot of work to be done, we are pleased with our
solid first quarter results. We believe they demonstrate progress toward our
planned improvements to gross margins, expenses, and cash-flows,' stated
The Company generated approximately
operations and paid down approximately
'We will continue to strive to make improvements in our business
operations. We will also continue to drive our strategic focus to evolve our
product portfolio, build new customer relationships and to maintain our
technology and market leadership in key markets around the world,' added
Consolidated Second Quarter 2006 Guidance Total Revenues: Approximately $545-$575 million Gross Profit Margin: Total Company: 15-17% Operating Expenses: Approximately: $141 million, including approximately $4 million in expenses associated with stock compensation GAAP EPS: Loss of approximately ($0.45) to ($0.55) Conference Call
The Company will conduct a conference call, which is open to the public,
to discuss these results. The call will take place today,
A replay of the call will be available from approximately
replay numbers are as follows:
706-645-9291. The Access Code is 2062973.
Investors will also have the opportunity to listen to the conference call
and the replay over the Internet through UTStarcom's Web site at:
To listen to the live call, please go to the Web site at least 15 minutes
early to register and to download and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will also be
available on this site.
About UTStarcom, Inc.
UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. The company sells its broadband,
wireless, and handset solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables its customers
to rapidly deploy revenue-generating access services using their existing
infrastructure, while providing a migration path to cost-efficient, end-to-end
IP networks. Founded in 1991 and headquartered in Alameda, California, the
company has research and design operations in the
For more information about UTStarcom, visit the company's Web site at
This release includes forward-looking statements, including the foregoing
statements regarding the anticipated continued progress with respect to
business operation and execution, the anticipated improvement in the Company's
strategic focus and the resulting evolution of product portfolio, the
anticipated ability to build new customer relationships, the expectation that
the Company will be able to maintain its technology and market leadership in
key markets, and the guidance given for anticipated total revenues, gross
profit margin, operating expenses and earnings per share for the second
quarter of 2006. These statements are forward-looking in nature and subject
to risks and uncertainties that may cause actual results to differ materially.
These risk factors include rapidly changing technology, the changing nature of
global telecommunications markets, the termination of significant contracts,
the direction and results of future research and development efforts, evolving
product and applications standards, reduction or delays in system deployments,
product transitions, potential non-realization of backlog, changes in demand
for and acceptance of the Company's products, general adverse economic
conditions, and trends and uncertainties such as changes in government
regulation and licensing requirements. The Company also refers readers to the
risk factors identified in its latest Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the
Securities and Exchange Commission.
UTStarcom, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (Unaudited) March 31, December 31, 2006 2005 ASSETS Current assets: Cash, cash equivalents and short-term investments $684,477 $658,837 Accounts receivable, net 494,988 522,964 Notes receivable 7,659 2,065 Inventories, net 424,028 425,955 Deferred costs/Inventories at customer sites under contracts 246,678 239,876 Prepaids 66,598 61,795 Short-term restricted cash and investments 69,078 53,680 Other current assets 36,677 37,267 Total current assets 2,030,183 2,002,439 Property, plant and equipment, net 221,003 233,403 Long-term investments 25,643 26,023 Goodwill 3,063 3,063 Intangible assets, net 70,389 75,313 Other long-term assets 25,235 25,811 Total assets $2,375,516 $2,366,052 LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $339,865 $320,677 Short-term debt 172,141 198,826 Income taxes payable 31,708 33,608 Customer advances 265,359 221,301 Deferred revenue 86,681 69,030 Other current liabilities 243,888 289,867 Total current liabilities 1,139,642 1,133,309 Long-term debt 274,900 274,900 Other long-term liabilities 30,943 20,958 Total liabilities 1,445,485 1,429,167 Minority interest in consolidated subsidiaries 7,852 8,338 Stockholders' equity: Common stock: $0.00125 par value; authorized: 750,000,000 shares; issued and outstanding: 120,607,118 and 120,585,158 at March 31, 2006 and December 31, 2005, respectively 152 152 Additional paid-in capital 1,166,519 1,168,166 Deferred stock compensation -- (3,493) Retained earnings (accumulated deficit) (263,809) (253,174) Accumulated other comprehensive income 19,317 16,896 Total stockholders' equity 922,179 928,547 Total liabilities, minority interest and stockholders' equity $2,375,516 $2,366,052 UTStarcom, Inc. Condensed Consolidated Statement of Operations (in thousands, except per share amounts) (Unaudited) Three months ended March 31, 2006 2005 as restated Net sales $596,571 $901,884 Cost of sales 474,117 664,460 Gross profit 122,454 237,424 Operating expenses: Selling, general and administrative 83,172 109,011 Research and development 46,309 66,260 Amortization of intangible assets 4,925 6,972 Total operating expenses 134,406 182,243 Operating (loss) earnings (11,952) 55,181 Interest income (expense) 32 (2,929) Other income (expense), net 3,568 (6,847) (Loss) income before income taxes, minority interest and equity in loss of affiliated companies (8,352) 45,405 Income tax expense 2,839 7,680 Minority interest in consolidated subsidiaries 556 (222) Equity in loss of affiliated companies -- (459) Net (loss) income $(10,635) $37,044 Basic (loss) earnings per share $(0.09) $0.32 Diluted (loss) earnings per share $(0.09) $0.29 Weighted average shares used in per-share calculation: - Basic 120,600 114,523 - Diluted 120,600 132,949 UTStarcom, Inc. Condensed Consolidated Statement of Cash Flows (in thousands) (Unaudited) Three months ended March 31, 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: as restated Net (loss) income $(10,635) $37,044 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 17,476 25,897 Loss on sale and disposal of assets 4,708 1,278 Stock compensation expense 4,159 575 Reversal of stock compensation due to terminations (2,390) -- Provision for doubtful accounts 892 17,548 Provision for inventory reserve 795 15,160 Other (578) 1,769 Changes in operating assets and liabilities, net of of acquisitions: Accounts receivable 28,787 (120,621) Inventories (4,337) (15,724) Deferred costs/Inventories at customer sites under contracts (810) 3,533 Other current and non-current assets (6,771) 49,621 Accounts payable 18,077 33,429 Income taxes payable (2,020) (32,015) Customer advances 43,097 (223,720) Deferred revenue 14,207 28,016 Other current liabilities (50,985) (4,667) Net cash provided by (used in) operating activities 53,672 (182,877) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (3,162) (28,313) Purchase of business, net of cash acquired -- (18,449) Sale of business 19,965 -- Change in restricted cash and investments (17,037) 5,796 Purchase of short-term investments (10,819) (101,194) Proceeds from sale of short-term investments 13,309 221,253 Other 499 (18) Net cash provided by investing activities 2,755 79,075 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 62,370 146,000 Payments on borrowings (89,948) (230,000) Other (3,184) 667 Net cash used in financing activities (30,762) (83,333) Effect of exchange rate changes on cash and cash equivalents 2,389 (2,683) Net increase (decrease) in cash and cash equivalents 28,054 (189,818) Cash and cash equivalents at beginning of period 645,571 562,532 Cash and cash equivalents at end of period $673,625 $372,714 Supplemental disclosure of cash flow information: Cash paid: Interest $2,511 $5,104 Income taxes $3,801 $1,489 Non-cash operating activity Accounts receivable transferred to notes receivable $8,977 $9,394
SOURCE UTStarcom, Inc.