UTStarcom Releases Fourth Quarter and Full Year 2007 Financial Results
ALAMEDA, Calif., Feb. 28 /PRNewswire-FirstCall/ -- UTStarcom, Inc.
(Nasdaq: UTSI), a global leader in IPTV and IP-based broadband and switching
solutions, today reported financial results for the fourth quarter of 2007 and
for the full year ended December 31, 2007.
Fourth Quarter Revenue of $806 Million up 14.5% Year-over-Year
Company Also Announces it has Transferred $289.5 Million To the Trustee of its Convertible Notes Due March 1, 2008 to Pay in Full its Principal and Interest Obligations Under the Note
2007 Financial Results
Net sales for the fourth quarter 2007 were
quarter 2007 were 12.7% as compared to 11.1% in the fourth quarter of 2006.
Net loss for the fourth quarter of 2007 was
in the fourth quarter of 2006.
Certain significant items in the fourth quarter include: -- A restructuring charge of $14.5 million -- A $23 million non-cash impairment of long lived assets primarily related to the IP-CDMA business unit -- A tax accrual of $17.1 million related to China withholding tax on dividends and capital gains for anticipated future remittances -- A cash gain of $53.5 million related to the sale of securities
Net sales for the full year 2007 were
with 15.7% in 2006. Net loss for the year was
share in 2006.
'Beginning in the fourth quarter of 2007, we launched a number of
initiatives, including a restructure of the Company to focus on our core
growth technologies, including IPTV, and IP-based softswitch and broadband
devices. Through 2008, we shall be very focused on continued operational
improvements and the execution of our new strategy,' stated
chief operating officer of UTStarcom. 'We are also actively pursuing our
liquidity plan to strengthen our cash position, which includes the divestiture
of certain non-core assets. We are committed to fulfilling our goal of
returning the company to profitability and positive cash flows.'
The Company also announced that it has transferred
Trustee of its 10 7/8% Convertible Subordinated Notes, due
full repayment of its principal and interest obligations under the Notes.
Added Blackmore, 'We are very pleased to be able to pay off the Notes
using our own cash; we worked hard to ensure that we would not dilute our
As a result of the Company's recurring net losses, the continued use of
cash in its operations, and the repayment of the convertible notes described
above, the Company expects its independent registered public accounting firm
will issue a going concern uncertainty explanatory paragraph in its audit
report on the financial statements for the year ended
However, management believes that it has developed a liquidity plan that,
if executed successfully, will provide sufficient liquidity to finance the
Company's anticipated working capital and capital expenditure requirements for
the next twelve months.
Q1 2008 Guidance -- Revenue is expected to improve modestly year-over-year and should be in the range of $500-$520 million. -- Overall gross margins in the first quarter is expected to be approximately 13% -- First quarter operating expenses is expected to range between $115-$120 million, excluding any one-time items -- Gains of approximately $35 million from the sale of securities -- Cash flow from operations is expected to be about neutral
The Company will conduct a conference call, which is open to the public,
to discuss these results. The call will take place today,
number is 34095806.
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 34095806.
Investors will also have the opportunity to listen to the conference call
and the replay over the Internet through UTStarcom's Web site at:
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 Company's expectations with respect to its
anticipated results for the first quarter of 2008, anticipated realization of
operational improvements, and the Company's developing plans to provide
sufficient liquidity to finance the Company's anticipated working capital and
capital expenditure requirements for the next twelve months. 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 Exchange Commission.
UTStarcom, Inc. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) December 31, December 31, 2007 2006 ASSETS Current assets: Cash, cash equivalents and short-term investments $503,078 $671,169 Accounts and notes receivable, net 343,525 411,140 Inventories and deferred costs 524,727 635,838 Prepaids and other current assets 121,636 126,879 Total current assets 1,492,966 1,845,026 Long-term assets: Property, plant and equipment, net 209,094 213,155 Long-term deferred costs 164,766 176,649 Other long-term assets 117,762 148,475 Total assets $1,984,588 $2,383,305 LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $148,440 $304,869 Short-term debt 322,829 102,758 Customer advances 229,050 265,812 Deferred revenue 100,502 95,742 Other current liabilities 302,395 275,489 Total current liabilities 1,103,216 1,044,670 Long-term liabilities: Long-term debt 333 275,161 Long-term deferred revenue and other liabilities 259,358 282,621 Total liabilities 1,362,907 1,602,452 Minority interest in consolidated subsidiaries 3,705 6,493 Total stockholders' equity 617,976 774,360 Total liabilities, minority interest and stockholders' equity $1,984,588 $2,383,305 UTStarcom, Inc. Consolidated Statement of Operations (in thousands, except per share amounts) (Unaudited) Three months ended Twelve months ended December 31, December 31, 2007 2006 2007 2006 Net sales $806,330 $704,456 $2,466,970 $2,458,861 Cost of net sales 704,326 626,253 2,145,519 2,073,117 Gross profit 102,004 78,203 321,451 385,744 Operating expenses: Selling, general and administrative 76,146 87,547 319,145 334,455 Research and development 40,575 43,559 168,275 182,869 Amortization of intangible assets 3,824 4,304 15,961 18,871 Gain on sale of semi-conductor design assets - - (4,271) (12,291) Impairment of goodwill and other long-lived assets 19,912 - 19,912 - Restructuring charges 14,474 - 14,474 - Total operating expenses 154,931 135,410 533,496 523,904 Operating loss (52,927) (57,207) (212,045) (138,160) Interest (expense)/income, net (6,612) 1,734 (18,216) 3,141 Other income, net 56,318 (11,198) 64,796 1,092 Loss before income taxes and minority interest (3,221) (66,671) (165,465) (133,927) Income taxes (22,164) 23,991 (32,898) 15,024 Minority interest in losses of consolidated subsidiaries 828 651 2,788 1,558 Net loss $(24,557) $(42,029) $(195,575) $(117,345) Loss per share - Basic and diluted $(0.20) $(0.35) $(1.62) $(0.97) Weighted average shares used in per-share calculation: - Basic and diluted 121,340 120,741 121,059 120,657 UTStarcom, Inc. Condensed Consolidated Statement of Cash Flows (in thousands) (Unaudited) Twelve months Twelve months ended December ended December 31, 2007 31, 2006 Net cash (used in) provided by operating activities $(218,209) $66,079 Cash flows from investing activities: Property, plant and equipment, net (27,324) (26,274) Proceeds from sale of semiconductor design asset 4,271 35,965 Proceeds from sale of long-term investments 3,334 775 Change in restricted cash and long- term investments 6,591 20,882 Short-term investments, net 41,950 4,028 Investment in affiliates, net of cash acquired (79) (302) Other 695 991 Net cash provided by investing activities 29,438 36,065 Cash flows from financing activities: Borrowings, net (61,605) (100,113) Other 3,500 604 Net cash (used in) financing activities (58,105) (99,509) Effect of exchange rate changes on cash and cash equivalents 22,702 13,417 Net (decrease) increase in cash and cash equivalents (224,174) 16,052 Cash and cash equivalents at beginning of period 661,623 645,571 Cash and cash equivalents at end of period $437,449 $661,623
SOURCE UTStarcom, Inc.