UTStarcom Releases Financial Results for the First Quarter of 2008
ALAMEDA, Calif., May 15 /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 2008.
First Quarter 2008 Revenues of $586 Million
Net sales for the first quarter of 2008 were
Communications Division. Gross margins for the first quarter of 2008 were
15.7% as compared to 15.8% in the first quarter of 2007. The operating loss
for the first quarter of 2008 was
quarter of 2008 was
The significant items in the first quarter 2008 net income include: -- A gain on sale of investments of $48.3 million including Gemdale and Infinera -- A net $8.5 million tax benefit in China primarily due to a change in withholding tax laws
Cash, cash equivalents and short term investments was
quarter end, while the total debt was
'During the first quarter we made progress in moving the company forward
in terms of both financial and operational results. Our core areas of
Multimedia Communications and Broadband continued to win new business in key
markets while the Personal Communications Division's results benefited from
the introduction of new high end products.'
president and chief operating officer, went on to say, 'while we are
encouraged by this quarter's developments, we recognize that this is only a
step along our turnaround path and we will continue to push for improvements
throughout the company's activities.'
Q2 2008 Guidance -- Revenue is expected to be in the range of $580 - $610 million which would represent a growth of 8% - 13% above the same period last year -- Overall gross margins in the second quarter is expected to be approximately 14% depending upon the mix of business between our core and Personal Communications business segments -- Operating expenses are expected to range between $118-$123 million including the cost of certain external professional services
The company will host a conference call to discuss the results. The call
will take place at
conference call dial-in numbers are as follows:
International -- 706-902-1962. The conference ID number is 47434965.
A replay of the call will be available for 30 days. The conference call
replay numbers are as follows:
706-645-9291. The Access Code is 47434965.
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.
About UTStarcom, Inc.
UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. The company develops, manufactures and
markets its broadband, wireless, and terminal solutions to network operators
in both emerging and established telecommunications markets worldwide.
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. UTStarcom was founded in 1991 and
is headquartered in
development centers in the
For more information about UTStarcom, please visit the UTStarcom Web site
This release includes forward-looking statements, including the foregoing
statements regarding the company's guidance for the second quarter of 2008,
including anticipated revenue, gross margins, operating expenses and cash flow
from operations and anticipated realization of operational improvements, 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 and execute on its liquidity plans 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
UTStarcom, Inc. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) March 31, December 31, 2008 2007 ASSETS Current assets: Cash, cash equivalents and short-term investments $305,119 $503,078 Accounts and notes receivable, net 269,701 343,525 Inventories and deferred costs 521,794 524,727 Prepaids and other current assets 156,600 121,636 Total current assets 1,253,214 1,492,966 Long-term assets: Property, plant and equipment, net 210,336 209,094 Long-term deferred costs 164,922 164,766 Other long-term assets 121,181 117,762 Total assets $1,749,653 $1,984,588 LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $214,263 $148,440 Short-term debt 35,907 322,829 Customer advances 244,947 229,050 Deferred revenue 108,068 100,502 Other current liabilities 274,688 302,395 Total current liabilities 877,873 1,103,216 Long-term liabilities: Long-term debt 267 333 Long-term deferred revenue and other liabilities 254,486 259,358 Total liabilities 1,132,626 1,362,907 Minority interest in consolidated subsidiaries 806 3,705 Total stockholders' equity 616,221 617,976 Total liabilities, minority interest and stockholders' equity $1,749,653 $1,984,588 UTStarcom, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (Unaudited) Three months ended March 31 2008 2007 Net sales $585,989 $475,902 Cost of net sales 493,910 400,617 Gross profit 92,079 75,285 Operating expenses: Selling, general and administrative 79,744 79,837 Research and development 41,400 43,662 Amortization of intangible assets 1,824 4,046 Total operating expenses 122,968 127,545 Operating loss (30,889) (52,260) Interest expense, net (3,254) (1,815) Other income, net 53,970 3,970 Income (loss) before income taxes and minority interest 19,827 (50,105) Income taxes 5,020 (4,341) Minority interest in losses of consolidated subsidiaries 510 464 Net income (loss) $25,357 $(53,982) Income (loss) per share - Basic $0.21 $(0.45) Income (loss) per share - Diluted $0.21 $(0.45) Weighted average shares used in per share calculation: - Basic 122,096 120,900 - Diluted 123,098 120,900 UTStarcom, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Three months ended March 31, 2008 2007 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $25,357 $(53,982) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 10,112 14,744 Gain on sale of investments and liquidation of ownership interest in a variable interest entity (47,848) - Net loss (gain) on sale of fixed assets 8 (2,699) Stock-based compensation expense 4,795 2,755 Recovery of doubtful accounts (680) (5,281) Provision for (recovery of) deferred costs reserves 320 (1,504) Deferred income taxes (11,708) - Other (343) 266 Changes in operating assets and liabilities: Accounts receivable 75,177 60,296 Inventories 7,650 (2,422) Deferred costs 8,028 (5,222) Other assets (19,588) (31,433) Accounts payable 64,287 (41,324) Income taxes payable 1,414 5,969 Customer advances 19,902 44,298 Deferred revenue (5,771) (11,790) Other current liabilities (34,404) (79,336) Net cash provided by (used in) operating activities 96,708 (106,665) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (7,630) (5,221) Proceeds from the disposition of (purchase of) an investment interest (1,949) 1,800 Proceeds from repayment of loan by a variable interest entity 7,728 - Change in restricted cash (4,517) 10,365 Purchase of short-term investments (6,578) (15,576) Proceeds from sale of short-term investments 58,740 10,483 Other 96 (70) Net cash provided by investing activities 45,890 1,781 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings - 64,621 Payments on borrowings (288,861) (64,676) Other 2,473 (654) Net cash used in financing activities (286,388) (709) Effect of exchange rate changes on cash and cash equivalents 4,823 2,120 Net decrease in cash and cash equivalents (138,967) (103,473) Cash and cash equivalents at beginning of period 437,449 661,623 Cash and cash equivalents at end of period $298,482 $558,150
SOURCE UTStarcom, Inc.