UTStarcom Releases Second Quarter 2006 Financial Results
ALAMEDA, Calif., Aug. 9 /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 second quarter of 2006.
Second Quarter Revenues of $549.1 Million, Gross Margins of 19.9%, and Loss per Share of ($0.18)
Positive Cash Flow from Operations of Approximately $25 Million in the Second Quarter
Net sales for the second quarter of 2006 were
margins for the second quarter were 19.9% and GAAP net loss for the quarter
'We are pleased that we continue to demonstrate progress each quarter,'
UTStarcom. 'We believe we are making meaningful improvements to position the
company for long-term profitable growth.'
The Company's cash balance was approximately
the second quarter, reflecting approximately
from operations, offset by approximately
term debt in the quarter.
'We are seeing real demand for our technology on a worldwide basis and are
particularly encouraged by the interest in our IPTV solution which is showing
initial traction in
executive officer of UTStarcom. 'We believe that our global leadership in
IPTV is based on the superiority of our architecture and the significant lead
Consolidated Third Quarter 2006 Guidance Total Revenues: Approximately $590-$625 million Gross Profit Margin: Total Company: 16.5-18.5% Operating Expenses: Approximately: $135-$140 million, including approximately $4 million in expenses associated with stock compensation GAAP EPS: Loss of approximately ($0.23) to ($0.33) 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 3775097.
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 improvement in the Company's
financial results and long-term profitable growth, and the guidance given for
anticipated total revenues, gross profit margin, operating expenses (including
expenses associated with stock compensation) and earnings per share for the
third 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) June 30, December 31, ASSETS 2006 2005 Current assets: Cash, cash equivalents and short-term investments $657,613 $658,837 Accounts receivable, net 424,617 522,964 Notes receivable 11,593 2,065 Inventories 455,015 425,955 Deferred costs/Inventories at customer sites under contracts 256,812 239,876 Prepaids 60,085 61,795 Short-term restricted cash and investments 71,119 53,680 Other current assets 34,092 37,267 Total current assets 1,970,946 2,002,439 Property, plant and equipment, net 216,325 233,403 Long-term investments 29,824 26,023 Goodwill 3,063 3,063 Intangible assets, net 65,568 75,313 Other long-term assets 31,092 25,811 Total assets $2,316,818 $2,366,052 LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $363,097 $320,677 Short-term debt 122,587 198,826 Income taxes payable 37,101 33,608 Customer advances 291,964 221,301 Deferred revenue 66,776 69,030 Other current liabilities 218,194 289,867 Total current liabilities 1,099,719 1,133,309 Long-term debt 274,900 274,900 Other long-term liabilities 27,470 20,958 Total liabilities 1,402,089 1,429,167 Minority interest in consolidated subsidiaries 7,593 8,338 Stockholders' equity: Common stock: $0.00125 par value; authorized: 750,000,000 shares; issued and outstanding: 120,618,764 and 120,585,158 at June 30, 2006 and December 31, 2005, respectively 152 152 Additional paid-in capital 1,171,175 1,168,166 Deferred stock compensation - (3,493) Accumulated deficit (285,252) (253,174) Accumulated other comprehensive income 21,061 16,896 Total stockholders' equity 907,136 928,547 Total liabilities, minority interest and stockholders' equity $2,316,818 $2,366,052 UTStarcom, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (Unaudited) Three months ended Six months ended June 30, June 30, 2006 2005 2006 2005 As restated As restated Net sales $549,146 $719,759 $1,145,717 $1,621,643 Cost of net sales 439,860 607,621 913,977 1,272,081 Gross profit 109,286 112,138 231,740 349,562 Operating expenses: Selling, general and administrative 82,423 103,009 165,593 212,020 Research and development 46,743 65,621 93,052 131,881 Amortization of intangible assets 4,821 6,776 9,746 13,748 In-process research and development - 660 - 660 Restructuring costs - 15,127 - 15,127 Total operating expenses 133,987 191,193 268,391 373,436 Operating loss (24,701) (79,055) (36,651) (23,874) Interest income (expense), net 781 (3,259) 812 (6,188) Other income, net 6,887 8,867 10,454 2,020 Loss before income taxes, minority interest and equity in loss of affiliated companies (17,033) (73,447) (25,385) (28,042) Income tax expense (4,669) (240) (7,508) (7,920) Minority interest in losses of consolidated subsidiaries 259 313 815 91 Equity in loss of affiliated companies - (574) - (1,033) Net loss $(21,443) $(73,948) $(32,078) $(36,904) Loss per share - Basic and diluted $(0.18) $(0.64) $(0.27) $(0.32) Weighted average shares used in per-share calculation: - Basic and diluted 120,608 114,880 120,604 114,702 UTStarcom, Inc. Condensed Consolidated Statement of Cash Flows (in thousands) (Unaudited) Six months ended June 30, 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: As restated Net loss $(32,078) $(36,904) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 34,653 51,411 Loss on sale and disposal of assets 2,169 3,684 Loss on asset impairment - 6,739 Stock compensation expense 8,769 1,153 Provision for doubtful accounts 3,133 33,609 Provision for inventory reserve 5,978 28,241 Deferred income taxes - 97,466 Gain on extinguishment of debt - (11,094) Other (2,930) 2,768 Changes in operating assets and liabilities, net of acquisition: Accounts receivable 97,596 (74,915) Inventories (36,916) 41,929 Deferred costs/Inventories at customer sites under contracts (13,677) (31,966) Other current and non-current assets (7,784) 58,378 Accounts payable 39,693 24,830 Income taxes payable 3,438 (140,379) Customer advances 69,280 (225,238) Deferred revenue (2,699) 19,892 Other current liabilities (89,469) 11,035 Net cash provided by (used in) operating activities 79,156 (139,361) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (12,288) (46,325) Investment in affiliates, net of cash acquired (302) (2,550) Purchase of business, net of cash acquired - (23,806) Proceeds from sale of business 19,965 - Proceeds from disposal of property - 663 Change in restricted cash and investments (19,994) 2,708 Purchase of short-term investments (21,810) (123,768) Proceeds from sale of short-term investments 25,588 228,649 Other 1,672 (750) Net cash (used in) provided by investing activities (7,169) 34,821 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowing 62,545 278,381 Payments on borrowings (140,053) (373,081) Cash paid to extinguish debt - (15,781) Other 1,967 4,579 Net cash used in financing activities (75,541) (105,902) Effect of exchange rate changes on cash and cash equivalents 5,257 (1,766) Net increase (decrease) in cash and cash equivalents 1,703 (212,208) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 645,571 562,532 CASH AND CASH EQUIVALENTS AT END OF PERIOD $647,274 $350,324 Supplemental disclosure of cash flow information: Cash paid: Interest $4,596 $8,179 Income taxes $3,529 $11,387 Non-cash operating activity Accounts receivable transferred to notes receivable $15,376 $34,551 Property, plant and equipment exchanged for long-term investment $5,500 $-
SOURCE UTStarcom, Inc.