IR/インベスターリレーションズ
UTStarcom Releases Financial Results for the Fourth Quarter and Full Year 2009
Mar. 11, 2010 (PR Newswire) --
ALAMEDA, Calif., March 11 /PRNewswire-FirstCall/ -- UTStarcom, Inc. (Nasdaq: UTSI), today reported financial results for the fourth quarter of 2009 and for the full year ended December 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20051013/SFTH063LOGO)
"I am pleased we managed to deliver sequential revenue growth in the fourth quarter, particularly as we have repositioned the Company to focus on our core IP-based technology. Our fourth quarter results also reflect continued progress towards executing our restructuring aimed at returning the Company to profitability," said Peter Blackmore, UTStarcom's chief executive officer and president.
Fourth Quarter 2009 Financial Results
Net sales for the fourth quarter 2009 were $116 million as compared to $241 million in the fourth quarter of 2008. Gross margins for the fourth quarter 2009 were 30% as compared to 12% in the fourth quarter of 2008. The operating loss for the fourth quarter of 2009 and 2008 was $41 million and $79 million, respectively.
The GAAP net loss attributable to UTStarcom for the fourth quarter of 2009 was $39 million, or a loss of $0.31 per share, as compared to a loss of $81 million, or $0.65 per share in the fourth quarter of 2008.
The fourth quarter GAAP operating expenses of $76 million was negatively impacted by a $33 million non-cash asset impairment charge related to the Company's Hangzhou facility. As previously disclosed, the company entered into a sale and lease-back agreement related to the Hangzhou facility on December 21, 2009.
Full Year 2009 Financial Results
Net sales for the year 2009 were $386 million as compared to $1.6 billion for the year 2008. Gross profit for the year 2009 was $65 million as compared to $261 million for the year 2008. Gross margins for the year 2009 were 17% as compared to 16% in 2008. The operating loss for the full year 2009 and 2008 was $219 million and $176 million, respectively.
The GAAP net loss attributable to UTStarcom for the full year 2009 was $226 million, or a loss of $1.77 per share, as compared to a loss of $150 million, or $1.22 per share in the prior year.
Net cash, cash equivalents and short-term investments as of December 31, 2009 was $267 million compared to $314 million on December 31, 2008. The cash balance of $267 million includes $7 million deposit related to the sale of the Company's Hangzhou facility, and the remaining net proceeds are expected to be received upon closing of the transaction.
Non-GAAP Results
To enable a comparison of the financial results for the Company on a year-over-year basis the Company has prepared certain non-GAAP results which present the Company's results as if both the divestiture of PCD and the wind-down of the Company's Korea-based handset operations were completed prior to each time period presented.
The fourth quarter 2009 non-GAAP revenue was $104 million, the non-GAAP gross margin was 32% and the non-GAAP operating loss was $43 million. This compares to the fourth quarter 2008 non-GAAP revenue of $149 million, the non-GAAP gross margin of 23% and the non-GAAP operating loss of $70 million. The decrease in non-GAAP revenues is primarily due to the expected decline in the PAS businesses and the divestiture or wind-down of our non-core businesses.
The full year 2009 non-GAAP revenue, gross margins and operating loss were $330 million, 26% and $192 million, respectively. This compares to the full year 2008 non-GAAP revenue, gross margins and operating loss of $634 million, 30% and $199 million, respectively. The decrease in non-GAAP revenues reflects the expected low demand for the PAS infrastructure products, the exit from certain low margin Broadband products, and lower handset sales due to the continued wind-down of the Company's China handset business.
Conference Call
The Company will host a conference call to discuss the results at 2:00 p.m. (PST) / 5:00 p.m. (EST) on March 11, 2010 and 6:00 a.m. China time on March 12, 2010.
The conference call dial-in numbers are as follows: United States 877-405-3429; International 702-928-6906. The conference ID number is 5738-4442.
A replay of the call will be available for 7 days. The conference call replay numbers are as follows: United States -- 800-642-1687; International -- 706-645-9291. The Access Code is 5738-4442.
Investors will also have the opportunity to listen to the conference call and the replay over the Internet through the investor relations section of UTStarcom's Web site at: http://www.utstar.com.
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.
Discussion of Non-GAAP Financial Measures
On July 1, 2008, the Company divested its Personal Communications Division ("PCD") which has historically represented a significant portion of the Company's revenues. On December 18, 2008, the Company announced actions to wind down its Korea-based handset manufacturing operations. To enable a comparison of the financial results for the Company on a year-over-year and a quarter-over-quarter basis the Company has prepared certain non-GAAP results which present the Company's results as if both the divestiture of PCD and the wind down of the Company's Korea-based handset operations were completed prior to each time period presented. The reconciliation between GAAP and these non-GAAP financial measures is provided at the end of this press release and on the Company's website.
In addition, these non-GAAP measures are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States.
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 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 development operations in the United States, China, and India. For more information about UTStarcom, visit the Company's Web site at http://www.utstar.com.
Forward-Looking Statements
This release includes forward-looking statements, including statements regarding the Company's strategy to reduce operating expenses, achieve profitability, investment in selective products and certain geographic regions and transition to a new business model. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially. These risks include the ability of the Company to realize anticipated results of operational improvements, increase bookings, successfully transition to a new management team and headquarters location and execute on its business plan as well as 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. The Company is in a period of significant transition and in the conduct of its business is exposed to additional risks as a result. All forward-looking statements included in this release are based upon information available to the Company as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statement.
UTStarcom, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
December 31, December 31,
2009 2008
---- ----
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $266,881 $313,865
Accounts and notes receivable, net 43,773 169,496
Inventories and deferred costs 202,753 304,716
Prepaids and other current assets 74,354 144,515
------ -------
Total current assets 587,761 932,592
Long-term assets:
Property, plant and equipment, net 130,612 175,287
Long-term deferred costs 184,978 149,258
Other long-term assets 25,760 53,669
------ ------
Total assets $929,111 $1,310,806
======== ==========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $54,115 $176,384
Customer advances 120,364 144,700
Deferred revenue 170,777 117,584
Other current liabilities 147,914 181,852
------- -------
Total current liabilities 493,170 620,520
Long-term liabilities:
Long-term deferred revenue and other
liabilities 179,790 222,644
------- -------
Total liabilities 672,960 843,164
Total equity 256,151 467,642
------- -------
Total liabilities and equity $929,111 $1,310,806
======== ==========
UTStarcom, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three months ended Years ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $116,337 $241,097 $386,344 $1,640,449
Cost of net sales 81,361 211,209 321,365 1,379,207
------ ------- ------- ---------
Gross profit 34,976 29,888 64,979 261,242
------ ------ ------ -------
Operating expenses:
Selling, general and
administrative 26,452 46,360 140,742 257,559
Research and development 11,260 26,634 63,243 143,291
Amortization of intangible
assets - 278 - 4,111
Impairment of goodwill and
other long-lived assets 33,287 27,220 33,287 27,220
Restructuring charges 5,010 13,059 46,495 13,059
Gain on divestiture (432) (4,327) (100) (7,782)
---- ------ ---- ------
Total operating expenses 75,577 109,224 283,667 437,458
------ ------- ------- -------
Operating loss (40,601) (79,336) (218,688) (176,216)
------- ------- -------- --------
Interest income (expense), net 275 776 1,541 (2,948)
Other income (expense) 5,644 (2,680) 2,303 35,427
----- ------ ----- ------
Loss before income taxes (34,682) (81,240) (214,844) (143,737)
Income taxes benefit (expense) (4,694) 309 (10,860) (7,087)
------ --- ------- ------
Net loss (39,376) (80,931) (225,704) (150,824)
Net income (loss) attributable
to noncontrolling interest (16) (18) 16 508
--- --- --- ---
Net loss attributable to
UTStarcom, Inc. $(39,392) $(80,949) $(225,688) $(150,316)
======== ======== ========= =========
Net loss per share attributable
to UTStarcom, Inc. -Basic
and Diluted $(0.31) $(0.65) $(1.77) $(1.22)
Weighted average shares used in
per share calculation:
Basic and Diluted 128,581 124,843 127,346 123,490
======= ======= ======= =======
UTStarcom, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Years ended December 31,
2009 2008
---- ----
(In thousands)
Net cash used in operating activities $(67,448) $(55,164)
-------- --------
Cash flows from investing activities:
Property, plant and equipment, net (2,012) (14,214)
Deposit received on pending sale of building 7,307 -
Net proceeds from divestitures 11,508 214,051
Proceeds from disposition of an
investment interest 2,639 33,429
Proceeds from repayment of loan by a variable
interest entity - 7,728
Change in restricted cash (1,973) (8,216)
Short-term investments, net 3,214 12,907
Other 635 361
--- ---
Net cash provided by investing activities 21,318 246,046
------ -------
Cash flows from financing activities:
Borrowings, net - (325,317)
Other (388) (7,295)
---- ------
Net cash used in financing activities (388) (332,612)
Effect of exchange rate changes on cash and cash
equivalents 2,758 13,884
----- ------
Net decrease in cash and cash equivalents (43,760) (127,846)
Cash and cash equivalents at beginning of period 309,603 437,449
------- -------
Cash and cash equivalents at end of period $265,843 $309,603
======== ========
UTSTARCOM, INC.
March 11, 2010 Conference Call
RECONCILIATION OF GAAP REVENUE TO NON-GAAP REVENUE
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented
on a GAAP basis, UTStarcom uses certain non-GAAP measures which are
adjusted to present those metrics as if both PCD had been divested and
the Korea handsets business had been wound down prior to each time period
reflected below. We believe this enables year over year comparisons to
our recent financial results. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of UTStarcom's underlying results and trends. In
addition, these adjusted non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for results
prepared in accordance with generally accepted accounting principles in
the United States.
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-08 30-Jun-08 30-Sep-08 31-Dec-08 31-Dec-08
--------- --------- --------- --------- ---------
GAAP Revenue (a) $586 $633 $181 $241 $1,641
Less: PCD Segment
Revenue (b) 431 449 - - 880
Less: Korea Handset
Sales to PCD (c) - - 35 92 127
---- ---- ---- ---- ----
Non-GAAP Revenue $155 $184 $146 $149 $634
==== ==== ==== ==== ====
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Dec-09
--------- --------- --------- --------- ---------
GAAP Revenue (a) $119 $80 $71 $116 $386
Less: PCD Segment
Revenue (b) - - - - -
Less: Korea Handset
Sales to PCD (c) 39 (3) 8 12 56
--- --- --- ---- ----
Non-GAAP Revenue $80 $83 $63 $104 $330
=== === === ==== ====
(a) GAAP Revenue for each period is the consolidated revenue as reported
on Form 10-Q or Form 10-K, as applicable, for such period, except for the
consolidated revenue for the quarters ended December 31, 2008 and 2009,
which is derived from the revenue reported in the Form 10-Qs and Form 10-K
with respect to fiscal years 2008 and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Prior to the July 1, 2008 divestiture of PCD, Korea handset did not
record revenue for units shipped to PCD as this activity was an
intercompany transfer. After July 1, 2008 this activity was recorded as a
third party sale in the Handset segment.
UTSTARCOM, INC.
March 11, 2010 Conference Call
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period
reflected below. We believe this enables year over year comparisons to
our recent financial results. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of UTStarcom's underlying results and trends. In
addition, these adjusted non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for results
prepared in accordance with generally accepted accounting principles in
the United States.
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-08 30-Jun-08 30-Sep-08 31-Dec-08 31-Dec-08
--------- --------- --------- --------- ---------
GAAP Gross
Profit (a) $92 $82 $57 $30 $261
GAAP Gross
Margin % 16% 13% 31% 12% 16%
Less: PCD Segment
Gross Profit (b) 33 36 - - 69
Less: Korea
Handset Gross
Profit from
Sales to PCD (c) 2 0 6 (4) 4
--- --- --- --- ----
Non-GAAP Gross
Profit $57 $46 $51 $34 $188
=== === === === ====
Non-GAAP Gross
Margin % 37% 25% 35% 23% 30%
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Dec-09
--------- --------- --------- --------- ---------
GAAP Gross
Profit (a) $22 ($16) $24 $35 $65
GAAP Gross
Margin % 18% (20%) 34% 30% 17%
Less: PCD Segment
Gross Profit (b) - - - - -
Less: Korea
Handset Gross
Profit from
Sales to PCD (c) 3 (28) 2 2 (21)
--- --- --- --- ---
Non-GAAP Gross
Profit $19 $12 $22 $33 $86
=== === === === ===
Non-GAAP Gross
Margin % 24% 14% 35% 32% 26%
(a) GAAP Gross Profit and GAAP Gross Margin % for each period is the
consolidated gross profit and gross margin % as reported on Form 10-Q or
Form 10-K, as applicable, for such period, except for the consolidated
gross profit and gross margin % for the quarters ended December 31, 2008
and 2009, which is derived from the gross profit and gross margin %
reported in the Form 10-Qs and Form 10-K with respect to fiscal years 2008
and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Prior to the July 1, 2008 divestiture of PCD, Korea handset earned a
gross profit on the intercompany transfer of inventory to PCD. This gross
profit was recorded in the Handset segment. After July 1, 2008 this
activity was recorded as a third party transaction.
UTSTARCOM, INC.
March 11, 2010 Conference Call
RECONCILIATION OF GAAP OPERATING EXPENSE TO NON-GAAP OPERATING
EXPENSE
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period
reflected below. We believe this enables year over year comparisons to
our recent financial results. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of UTStarcom's underlying results and trends. In
addition, these adjusted non-GAAP results are among the information
management uses as a basis for our planning and forecasting of
future periods. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for results
prepared in accordance with generally accepted accounting principles in
the United States.
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-08 30-Jun-08 30-Sep-08 31-Dec-08 31-Dec-08
--------- --------- --------- --------- ---------
GAAP Operating
Expense (a) $123 $113 $92 $109 $437
Less: PCD Operating
Expense (b) 8 7 - - 15
Less: Korea Handset
Operating Expense (c) 9 10 10 5 34
---- --- --- ---- ----
Non-GAAP Operating
Expense $106 $96 $82 $104 $388
==== === === ==== ====
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Dec-09
--------- --------- --------- --------- ---------
GAAP Operating
Expense (a) $81 $70 $58 $76 $285
Less: PCD Operating
Expense (b) - - - - -
Less: Korea Handset
Operating Expense (c) 3 2 1 - 6
--- --- --- --- ----
Non-GAAP Operating
Expense $78 $68 $57 $76 $279
=== === === === ====
(a) GAAP Operating Expense for each period is the consolidated operating
expense as reported on Form 10-Q or Form 10-K, as applicable, for such
period, except for the consolidated operating expense for the quarters
ended December 31, 2008 and 2009, which is derived from the operating
expenses reported in the Form 10-Qs and Form 10-K with respect to the
fiscal years 2008 and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Both prior to and after the July 1, 2008 divestiture of PCD, all
direct operating expense relating to Korea handset has been recorded in
the Handset segment.
UTSTARCOM, INC.
March 11, 2010 Conference Call
RECONCILIATION OF GAAP OPERATING LOSS TO NON-GAAP OPERATING LOSS
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period
reflected below. We believe this enables year over year comparisons to
our recent financial results. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of UTStarcom's underlying results and trends. In
addition, these adjusted non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for results
prepared in accordance with generally accepted accounting principles in
the United States.
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-08 30-Jun-08 30-Sep-08 31-Dec-08 31-Dec-08
--------- --------- --------- --------- ---------
GAAP Operating
Loss (a) ($31) ($31) ($35) ($79) ($176)
Less: PCD
Operating
Profit (b) 25 28 - - 53
Less: Korea
Handset Operating
Income (Loss) (c) (7) (10) (4) (9) (30)
---- ---- ---- ---- -----
Non-GAAP
Operating Loss ($49) ($49) ($31) ($70) ($199)
==== ==== ==== ==== =====
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Dec-09
--------- --------- --------- --------- ---------
GAAP Operating
Loss (a) ($59) ($85) ($34) ($41) ($219)
Less: PCD
Operating
Profit (b) - - - - -
Less: Korea
Handset Operating
Income (Loss) (c) - (30) 1 2 (27)
---- ---- ---- ---- -----
Non-GAAP
Operating Loss ($59) ($55) ($35) ($43) ($192)
==== ==== ==== ==== =====
(a) GAAP Operating Loss for each period is the consolidated operating
loss as reported on Form 10-Q or Form 10-K, as applicable, for such
period, except for the consolidated operating loss for the quarters ended
December 31, 2008 and 2009, which is derived from the operating loss
reported in the Form 10-Qs and Form 10-K with respect to fiscal years 2008
and 2009.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Both prior to and after the July 1, 2008 divestiture of PCD, the
operating loss relating to Korea handset has been recorded in the Handset
segment.
UTSTARCOM, INC.
March 11, 2010 Conference Call
ABBREVIATED NON-GAAP P&L STATEMENT (a)
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if both PCD had been divested and the Korea
handsets business had been wound down prior to each time period
reflected below. We believe this enables year over year comparisons to
our recent financial results. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of UTStarcom's underlying results and trends. In
addition, these adjusted non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for results
prepared in accordance with generally accepted accounting principles in
the United States.
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-08 30-Jun-08 30-Sep-08 31-Dec-08 31-Dec-08
--------- --------- --------- --------- ---------
Non-GAAP Revenue $155 $184 $146 $149 $634
Non-GAAP Gross
Profit 57 46 51 34 188
Non-GAAP Gross
Margin % 37% 25% 35% 23% 30%
Non-GAAP Operating
Expense 106 96 82 104 388
---- ---- ---- ---- -----
Non-GAAP
Operating Loss ($49) ($49) ($31) ($70) ($199)
==== ==== ==== ==== =====
Qtr ended Qtr ended Qtr ended Qtr ended Year ended
31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Dec-09
--------- --------- --------- --------- ---------
Non-GAAP Revenue $80 $83 $63 $104 $330
Non-GAAP Gross
Profit 19 12 22 33 86
Non-GAAP Gross
Margin % 24% 14% 35% 32% 26%
Non-GAAP Operating
Expense 78 68 57 76 279
---- ---- ---- ---- -----
Non-GAAP
Operating Loss ($59) ($55) ($35) ($43) ($192)
==== ==== ==== ==== =====
(a) Please refer to the preceding reconciliation tables for the
adjustments to GAAP Revenue, Gross Profit, Operating Expense and
Operating Loss.
SOURCE UTStarcom, Inc.