Recent Highlights: - 16% Quarterly Year-over-Year Revenue Growth;
FREMONT, Calif., July 23 /PRNewswire-FirstCall/ -- Ikanos Communications,
Inc. (Nasdaq: IKAN), a leading provider of advanced broadband for the digital
home, today reported its financial results for the second quarter ended
June 29, 2008.
"I am pleased with our second quarter financial results as revenue grew
16% on a year-over-year basis, and we reported our third consecutive quarter
of non-GAAP profits," said Cory Sindelar, Ikanos' chief financial officer.
"Revenue grew quarter-over-quarter in Japan thanks to the rollout of NTT's
Next Generation Network and IPTV service. Korea also remained strong. In
addition, we made progress in a couple of key areas. We garnered a number of
design wins with our Fusiv(R) Vx180 processor and continued to advance our
GPON initiative, enabling us to address future fiber-to-the-home market
opportunities."
Financial Highlights:
Revenue in the second quarter of 2008 was $29.9 million compared with
revenue of $29.7 million for the first quarter of 2008 and revenue of
$25.7 million for the second quarter of 2007.
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, and certain expenses resulting from
acquisitions such as amortization of intangible assets, 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 measures. For a reconciliation
of GAAP versus non-GAAP financial information, please see the attached
schedule.
GAAP net loss for the second quarter of 2008 was $4.0 million, or
$0.14 per share, on 29.3 million weighted average shares. This compares with a
net loss of $4.8 million, or $0.16 per share, on 29.5 million weighted average
shares in the first quarter of 2008 and with a net loss of $7.2 million, or
$0.25 per share, on 28.4 million weighted average shares in the second quarter
of 2007.
Non-GAAP net income for the second quarter of 2008 was $1.0 million, or
$0.03 per diluted share, on 29.8 million weighted average shares. This
compares with non-GAAP net income of $0.6 million, or $0.02 per diluted share,
in the first quarter of fiscal 2008, and with a non-GAAP net loss of
$2.9 million, or $0.10 per share, in the second quarter of 2007.
Revenue for the six months ended June 29, 2008 was $59.6 million, an
increase of 18%, compared with the $50.3 million reported for the six months
ended July 1, 2007.
GAAP net loss for the six months ended June 29, 2008 was $8.8 million, or
$0.30 per share, on 29.4 million weighted average shares. This compares with a
net loss of $16.2 million, or $0.58 per share, on 28.2 million weighted
average shares for the year ago period.
Non-GAAP net income for the six months ended June 29, 2008 was
$1.6 million, or $0.05 per share, compared with non-GAAP net loss of
$7.5 million, or $0.26 per diluted share, for the year ago period. Weighted
average shares used in computing non-GAAP net income (loss) per share were
30.7 million in 2008 and 28.2 million in 2007.
Leadership Change:
Ikanos announced the appointment of Michael Gulett to the position of
president and CEO. Gulett has served on the Ikanos Board of Directors since
2003, and brings more than 30 years of semiconductor and technology industry
experience to the Company. Gulett held a number of president and CEO positions
in both publicly traded and privately held companies, including Tzero
Technologies, Siliquent Technologies, ARC International, Virata Corporation
and others. Gulett replaces former Ikanos president and CEO Michael A. Ricci,
who is leaving the company and will pursue other interests.
Recent Highlights:
-- XAVi Technologies Corporation, a leading supplier of broadband
residential gateways and customer premise equipment, has selected the
Ikanos Fusiv Vx180 high-performance gateway processor for its
VDSL2/ADSL2+ triple play residential gateways. The XAVi residential
gateways will be sold globally, with a primary focus on the North
American and European markets.
-- Ikanos demonstrated its gigabit passive optical network (GPON)
technology at the ITU-T Interoperability Showcase at NXTcomm 2008. The
Company participated in the interoperability demonstration with its
integrated optical network terminal (ONT)/residential gateway (RG)
technology. The technology combines gigabit ethernet gateway processing
capabilities with an ITU-T G.984 standards-compliant GPON
media-specific access control (MAC).
-- Elizabeth Fetter has been appointed to Ikanos' board of directors.
Outlook:
-- Revenue is expected to be between $24 million and $26 million for the
third quarter of 2008.
-- Non-GAAP gross margins are expected to be between 49% and 51% in the
third quarter of 2008. GAAP gross margins in the third quarter of 2008
will be lower than non-GAAP gross margins, as they will include
amortization of acquisition-related intangibles of approximately
$0.8 to $1.5 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 $15.5 to
$16.5 million in the third quarter of 2008 and include an estimate for
severance-related charges. GAAP operating expenses in the third quarter
of 2008 will be higher, as they will include amortization of
acquisition-related intangibles of $0.7 million and charges related to
stock-based compensation expense in accordance with FAS 123(R) of
$2.8 to $3.5 million.
Second Quarter Fiscal Year 2008 Conference Call:
Management will review the second quarter of 2008 financial results and
its expectations for subsequent periods at a conference call on July 23rd at
2:00 p.m. Pacific Standard Time. To listen to the call and view the
accompanying slides, please visit http://ir.ikanos.com/ and click on the link
provided for the web cast or dial 706-902-1343 and enter pass code 55278114.
The web cast will be archived and available through July 29, 2008 at
http://ir.ikanos.com/ or by calling 706-645-9291 and enter pass code 55278114.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (NASDAQ: IKAN) is a leading provider of
advanced broadband solutions for the digital home. The company's multi-mode
VDSL2/ADSLx, network processor and other products power the access
infrastructure and customer premises equipment for many of the world's leading
network equipment manufacturers and telecommunications service providers. For
more information, visit http://www.ikanos.com.
(C) 2008 Ikanos Communications, Inc. All Rights Reserved. Ikanos
Communications, Ikanos, the Ikanos logo, Ikanos Programmable Operating System,
Arion, CleverConnect, Eagle, Fiber Fast, Fusiv, Fx, FxS, LoopNostics, Maximus,
Palladia, RRA, SmartLeap and VLR are among the trademarks or registered
trademarks of Ikanos.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995
This document contains forward-looking statements that involve risks and
uncertainties concerning Ikanos Communications, including statements regarding
the demand for its products, customers' expected deployment plans, expected
revenue for the third quarter of 2008, expected gross margins for the third
quarter of 2008, and expected operating expenses for the third quarter of
2008. 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, among others, the ability of the Company to
deliver full production releases of our newer products that are accepted by
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, Ikanos' continued ability to
deliver production volumes of new 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' 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 Six Months
Ended Ended
June 29, July 1, June 29, July 1,
2008 2007 2008 2007
Revenue $29,855 $25,658 $59,552 $50,326
Cost of revenue16,420 14,614 34,05329,870
Gross margin 13,435 11,044 25,49920,456
Operating expenses:
Research and development 11,571 12,421 23,23425,032
Selling, general and administrative 6,2707,027 12,14014,141
Total operating expenses 17,841 19,448 35,37439,173
Loss from operations (4,406) (8,404) (9,875) (18,717)
Interest income, net4661,3441,242 2,625
Loss before income taxes (3,940) (7,060) (8,633) (16,092)
Provision for income taxes 33 102 124 154
Net loss $(3,973) $(7,162) $(8,757) $(16,246)
Basic and diluted net loss per share $(0.14) $(0.25) $(0.30) $(0.58)
Weighted average number of shares 29,308 28,404 29,42628,209
IKANOS COMMUNICATIONS, INC.
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Operations
(In thousands, except per share data)
Three Months Ended
June 29, 2008
Non-GAAP
As Reported Adjustments Non-GAAP
Revenue $29,855 $- $29,855
Cost of revenue 16,420 (118)(a)14,835
(763)(b)
(704)(c)
Gross margin 13,435(1,585) 15,020
Operating expenses:
Research and development 11,571(1,471)(a) 9,975
(125)(b)
Selling, general and
administrative6,270(1,029)(a) 4,453
(788)(b)
Total operating expenses 17,841(3,413) 14,428
Income (loss) from operations (4,406)4,998 592
Interest income and other, net 466 - 466
Income (loss) before income taxes (3,940)4,998 1,058
Provision for income taxes33 - 33
Net income (loss)$(3,973) $4,998$1,025
Net income (loss) per shares:
Basic$(0.14) $0.03
Diluted $(0.14) $0.03
Weighted average number of shares:
Basic29,308 29,308
Diluted 29,308 29,759
Three Months Ended
July 1, 2007
Non-GAAP
As Reported Adjustments Non-GAAP
Revenue $25,658 $- $25,658
Cost of revenue 14,614 (62)(a)14,117
(435)(b)
Gross margin 11,044 (497) 11,541
Operating expenses:
Research and development 12,421(1,921)(a)10,375
(125)(b)
Selling, general and
administrative7,027(1,510)(a) 5,288
(229)(b)
Total operating expenses 19,448(3,785) 15,663
Income (loss) from operations (8,404)4,282(4,122)
Interest income and other, net 1,344 - 1,344
Income (loss) before income taxes (7,060)4,282(2,778)
Provision for income taxes 102 - 102
Net income (loss)$(7,162) $4,282 $(2,880)
Net income (loss) per shares:
Basic$(0.25) $(0.10)
Diluted $(0.25) $(0.10)
Weighted average number of shares:
Basic28,404 28,404
Diluted 28,404 28,404
Notes: Three Months Ended
June 29, July 1,
2008 2007
(a) Stock-based compensation$2,618$3,493
(b) Amortization of acquired
intangible assets 1,676 789
(c) Fair value adjustment of acquired
inventory 704 -
$4,998$4,282
IKANOS COMMUNICATIONS, INC.
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Operations
(In thousands, except per share data)
Six Months Ended
June 29, 2008
Non-GAAP
As Reported Adjustments Non-GAAP
Revenue $59,552 $- $59,552
Cost of revenue 34,053 (237)(a)30,738
(1,982)(b)
(1,096)(c)
Gross margin 25,499 (3,315) 28,814
Operating expenses:
Research and development 23,234 (3,042)(a)19,632
(250)(b)
(310)(d)
Selling, general and
administrative 12,140 (2,154)(a) 8,698
(1,288)(b)
Total operating expenses 35,374 (7,044) 28,330
Income (loss) from operations(9,875)10,359 484
Interest income and other, net1,242- 1,242
Income (loss) before income taxes(8,633)10,359 1,726
Provision for income taxes 124- 124
Net income (loss) $(8,757) $10,359$1,602
Net income (loss) per shares:
Basic$(0.30) $0.05
Diluted $(0.30) $0.05
Weighted average number of shares:
Basic29,426 29,426
Diluted 29,426 30,731
Six Months Ended
July 1, 2007
Non-GAAP
As Reported Adjustments Non-GAAP
Revenue $50,326 $- $50,326
Cost of revenue 29,870(87)(a)28,522
(1,261)(b)
Gross margin 20,456 (1,348) 21,804
Operating expenses:
Research and development 25,032 (3,746)(a)21,036
(250)(b)
Selling, general and
administrative 14,141 (2,987)(a)10,696
(458)(b)
Total operating expenses 39,173 (7,441) 31,732
Income (loss) from operations (18,717) 8,789(9,928)
Interest income and other, net 2,625- 2,625
Income (loss) before income taxes (16,092) 8,789(7,303)
Provision for income taxes 154- 154
Net income (loss) $(16,246)$8,789 $(7,457)
Net income (loss) per shares:
Basic $(0.58) $(0.26)
Diluted $(0.58) $(0.26)
Weighted average number of shares:
Basic 28,209 28,209
Diluted 28,209 28,209
Notes:Six Months Ended
June 29, July 1,
2008 2007
(a) Stock-based compensation$5,433$6,820
(b) Amortization of acquired
intangible assets 3,520 1,969
(c) Fair value adjustment of
acquired inventory 1,096 -
(d) In-process research and development310 -
Total non-GAAP adjustments $10,359$8,789
IKANOS COMMUNICATIONS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
June 29,December 30,
2008 2007
Assets
Current assets:
Cash, cash equivalents and short-term
investments $70,772$83,972
Accounts receivable, net 15,081 17,081
Inventory 12,934 13,025
Prepaid expenses and other current assets 2,877 3,192
Total current assets 101,664117,270
Long-term investments6,468 7,001
Property and equipment, net 11,934 13,916
Intangible assets, net 10,063 6,564
Goodwill 7,397 6,247
Other assets 3,007 2,158
$140,533 $153,156
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $12,276$12,852
Accrued liabilities 12,259 15,371
Total current liabilities 24,535 28,223
Stockholders' equity 115,998124,933
$140,533 $153,156
SOURCE Ikanos Communications, Inc.
