SOURCE: Ikanos Communications

Ikanos Communications

April 26, 2012 16:10 ET

Ikanos Communications Announces Results for the Fiscal First Quarter of 2012

FREMONT, CA--(Marketwire - Apr 26, 2012) - Ikanos Communications, Inc. (NASDAQ: IKAN)

Recent Highlights:

  • Revenue of $30.8 Million
  • GAAP Net Loss of $(3.7) Million or $(0.05) Per Share
  • Cash and Cash Equivalents Increased to $39.7 Million

Ikanos Communications, Inc. (NASDAQ: IKAN), a leading provider of advanced broadband semiconductor and integrated firmware products for the digital home, today announced its financial results for the fiscal first quarter of 2012 ended April 1, 2012.

"Ikanos completed the first quarter with revenue of $30.8 million and GAAP gross profit of 52%, while improving its cash position to $39.7 million." said Dennis Bencala, chief financial officer and vice president finance of Ikanos. "We continued to deliver our latest generation of communications processors to the market and made substantial progress on the design and development of our award winning NodeScale Vectoring products."

Financial Highlights
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), non-GAAP gross profits, non-GAAP operating expenses and non-GAAP earnings per share, where applicable, exclude the income statement effects of stock-based compensation, restructuring charges, gains on sales of impaired securities ("Investment gain") and amortization of intangible assets. Ikanos has provided these measures because its 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 schedules.

Fiscal First Quarter 2012 Results
Revenue for the first quarter of 2012 was $30.8 million compared to revenue of $31.7 million for the first quarter of 2011 and revenue of $35.4 million for the fourth quarter of 2011. GAAP gross profit for the first quarter of 2012 was 52% compared to a GAAP gross profit of 52% for the first quarter of 2011 and GAAP gross profit of 56% for the fourth quarter of 2011.

Non-GAAP gross profit for the first quarter of 2012 was 54% compared to a non-GAAP gross profit of 54% for the first quarter of 2011 and non-GAAP gross profit of 57% for the fourth quarter of 2011.

GAAP operating expenses for the first quarter of 2012 were $19.8 million, compared to operating expenses of $19.8 million for the first quarter of 2011 and operating expenses of $18.0 million for the fourth quarter of 2011.

Non-GAAP operating expenses for the first quarter of 2012 were $17.8 million, compared to non-GAAP operating expenses of $18.8 million for the first quarter of 2011 and non-GAAP operating expenses of $17.4 million for the fourth quarter of 2011.

GAAP net loss for the first quarter of 2011 was $(3.7) million, or a loss of $(0.05) per share on 69.3 million weighted average shares outstanding. This compares with a net loss of $(2.1) million, or a loss of $(0.03) per share on 68.2 million weighted average shares outstanding for the first quarter of 2011 and net income of $0.5 million, or earnings of $0.01 per share on 69.7 million weighted average shares outstanding for the fourth quarter of 2011.

Non-GAAP net loss for the first quarter of 2012 was $(1.2) million, or a loss of $(0.02) per share on 69.3 million weighted average shares outstanding compared to a non-GAAP net loss of $(1.8) million, or a loss of $(0.03) per share on 68.2 million weighted average shares outstanding for the first quarter of 2011, and to a non-GAAP net income of $1.6 million, or $0.02 per share, on 69.7 million weighted average shares outstanding in the fourth quarter of 2011.

Cash and cash equivalents at the end of first quarter of 2012 were $39.7 million compared to $34.8 million at the end of the fourth quarter of 2011.

Additionally, at the end of the first quarter of 2012 inventory was $7.8 million compared to $9.5 million at the end of the fourth quarter of 2011. Current liabilities at the end of the first quarter of 2012 were $19.7 million compared to $16.1 million at the end of the fourth quarter of 2011.

Outlook
Revenue is expected to be between $31 million and $33 million for the fiscal second quarter of 2012.

GAAP gross profit for the fiscal second quarter of 2012 is expected to be between 49% and 52%. Non-GAAP gross profit is expected to be between 50% and 53% for the second quarter of 2012.

GAAP operating expenses for the fiscal second quarter of 2012 are expected to be in the range of $20 million to $21 million. Non-GAAP operating expenses are expected to be in the range of $19 million to $20 million for the second quarter of 2012.

Restructuring Plan
As announced in February, the Company effectively completed its worldwide restructuring plan in the first quarter of this year. As a result of the restructuring plan the Company reduced headcount by approximately 15% and incurred a total pre-tax restructuring charge of $1.1 million in the first quarter. The restructuring charge included expenses related to severance payments to terminated employees and other exit-related costs arising from contractual and other obligations.

Recent Highlights and Product Updates

In broadband DSL, Ikanos' patent-pending NodeScale Vectoring enabled products continue to outperform competing solutions in carrier lab trials around the world. Ikanos' award winning technology delivers full vectoring performance and is capable of scaling to support the entire network - up to 384 ports and beyond. Additionally our new G.Vector capable Fusiv Vx185 and 183 family of products further increase realized data throughput performance levels, setting a new, higher bar for broadband DSL services. These products provide the opportunity for carriers to deploy bandwidth rich, triple play applications to the market. We have now received our first production orders and expect to begin volume shipments of the Fusiv Vx185 and 183 in the second quarter of 2012.

First Quarter Conference Call
Management will review the first quarter financial results and its expectations for subsequent periods on a conference call on Thursday, April 26, 2012 at 1:30 p.m. Pacific Time. To listen to the call, please visit http://www.ikanos.com/investor/irevents/ and click on the link provided for the webcast or dial (888) 466-4587 or (719) 325-2327 and enter conference ID 9357342. The webcast will be archived and available for 90 days at http://www.ikanos.com/investor/irevents/. A replay of the conference call will be accessible until July 25, 2012 by dialing (888) 203-1112 or (719) 457-0820 and entering conference ID 9357342.

About Ikanos Communications, Inc.
Ikanos Communications, Inc. (NASDAQ: IKAN) is a leading provider of advanced broadband semiconductor and integrated firmware 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.

© 2012 Ikanos Communications, Inc. All Rights Reserved. Ikanos Communications, Ikanos, the Ikanos logo, the Bandwidth without boundaries tagline, Fusiv, Ikanos Velocity and NodeScale Vectoring 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 press release contains forward-looking statements that are subject to risks and uncertainties concerning Ikanos Communications, including statements regarding our outlook, such as our expected revenue, gross profits, operating expenses, and the benefits of non-GAAP measures, our restructuring plan, product testing and shipment, and anticipated benefits of our products. 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, macroeconomic conditions which may cause our customers to defer purchasing plans, our ability to deliver full production releases of our newer products and the acceptance of those products by our customers, the continued demand by telecommunications service providers for specific xDSL 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, our ability to develop commercially successful products as a result of our current research and development programs, our ability to successfully execute our restructuring plan, 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 our Annual Report on Form 10-K for the fiscal year ended January 1, 2012 filed with the Securities and Exchange Commission (SEC) on February 23, 2012, as well as other reports that Ikanos files from time to time with the SEC. 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
April 1, 2012 January 1, 2012 April 3, 2011
Revenue $ 30,760 $ 35,443 $ 31,672
Cost of revenue 14,653 15,556 15,151
Gross profit 16,107 19,887 16,521
Operating expenses:
Research and development 14,000 13,069 13,656
Selling, general and administrative 4,680 4,955 6,145
Restructuring charges 1,092 - 47
Total operating expenses 19,772 18,024 19,848
Income (loss) from operations (3,665 ) 1,863 (3,327 )
Investment gain - - 1,295
Interest income and other, net 75 (161 ) 68
Income (loss) before income taxes (3,590 ) 1,702 (1,964 )
Provision for income taxes 115 1,157 99
Net income (loss) $ (3,705 ) $ 545 $ (2,063 )
Net income (loss) per share
Basic $ (0.05 ) $ 0.01 $ (0.03 )
Diluted $ (0.05 ) $ 0.01 $ (0.03 )
Weighted average number of shares
Basic 69,335 69,182 68,186
Diluted 69,335 69,658 68,186
IKANOS COMMUNICATIONS, INC.
Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended April 1, 2012 Three Months Ended April 3, 2011
As Reported Non-GAAP Adjustments Non-GAAP As Reported Non-GAAP Adjustments Non-GAAP
Revenue $ 30,760 $ - $ 30,760 $ 31,672 $ - $ 31,672
Cost of revenue 14,653 (3) (a) 14,150 15,151 (42) (a) 14,609
(500) (b) (500) (b)
Gross profit 16,107 (503) 16,610 16,521 (542) 17,063
Operating expenses:
Research and development 14,000 (596) (a) 13,404 13,656 (408) (a) 13,248
Selling, general and administrative 4,680 (195) (a) 4,360 6,145 (425) (a) 5,595
(125) (b) (125) (b)
Restructuring charges 1,092 (1,092) (c) - 47 (47) (c) -
Total operating expenses 19,772 (2,008) 17,764 19,848 (1,005) 18,843
Income (loss) from operations (3,665) 2,511 (1,154) (3,327) 1,547 (1,780)
Investment gain - - - 1,295 (1,295) (d) -
Interest income and other, net 75 - 75 68 - 68
Income (loss) before income taxes (3,590) 2,511 (1,079) (1,964) 252 (1,712)
Provision for income taxes 115 - 115 99 - 99
Net income (loss) $ (3,705) $ 2,511 $ (1,194) $ (2,063) $ 252 $ (1,811)
Net income (loss) per share:
Basic $ (0.05) $ (0.02) $ (0.03) $ (0.03)
Diluted $ (0.05) $ (0.02) $ (0.03) $ (0.03)
Weighted average outstanding shares:
Basic 69,335 69,335 68,186 68,186
Diluted 69,335 69,335 68,186 68,186
Notes: Three Months Ended
April 1, 2012 April 3, 2011
(a) Stock-based compensation $ 794 $ 875
(b) Amortization of acquired intangible assets 625 625
(c) Restructuring charges 1,092 47
(d) Investment gain - (1,295)
Total non-GAAP adjustments $ 2,511 $ 252
IKANOS COMMUNICATIONS, INC.
Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended January 1, 2012
As Reported Non-GAAP Adjustments Non-GAAP
Revenue $ 35,443 $ - $ 35,443
Cost of revenue 15,556 9 (a) 15,065
(500) (b)
Gross profit 19,887 (491) 20,378
Operating expenses:
Research and development 13,069 (354) (a) 12,715
Selling, general and administrative 4,955 (124) (a) 4,706
(125) (b)
Total operating expenses 18,024 (603) 17,421
Income (loss) from operations 1,863 1,094 2,957
Interest income and other, net (161) - (161)
Income (loss) before income taxes 1,702 1,094 2,796
Provision for income taxes 1,157 - 1,157
Net income (loss) $ 545 $ 1,094 $ 1,639
Net income (loss) per share:
Basic $ 0.01 $ 0.02
Diluted $ 0.01 $ 0.02
Weighted average outstanding shares:
Basic 69,182 69,182
Diluted 69,658 69,658
Notes:
Three Months Ended
January 1, 2012
(a) Stock-based compensation $ 469
(b) Amortization of acquired intangible assets 625
Total non-GAAP adjustments $ 1,094
IKANOS COMMUNICATIONS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
April 1, January 1, April 3,
2012 2012 2011
Assets
Current assets:
Cash and cash equivalents $ 39,727 $ 34,760 $ 34,859
Accounts receivable, net 16,832 18,308 19,214
Inventory 7,755 9,474 15,109
Prepaid expenses and other current assets 2,321 2,531 2,266
Total current assets 66,635 65,073 71,448
Property and equipment, net 6,698 7,036 7,340
Intangible assets, net 2,977 3,602 5,477
Other assets 1,915 1,896 1,839
$ 78,225 $ 77,607 $ 86,104
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,701 $ 5,413 $ 9,574
Accrued liabilities 11,974 10,734 12,985
Total current liabilities 19,675 16,147 22,559
Other liabilities 739 738 478
Total liabilities 20,414 16,885 23,037
Stockholders' equity 57,811 60,722 63,067
$ 78,225 $ 77,607 $ 86,104

Contact Information

  • Media Contact:
    Gwen Dille
    Headfirst Communications for Ikanos
    510-406-2006
    Email Contact