In the first of two tables with the title "RECONCILIATION OF
GAAP TO NON-GAAP RESULTS," the row labeled "Non-cash interest
expense on convertible notes" was added just below the row
"Manufacturing transition costs."
The corrected release reads:
SYMMETRICOM REPORTS SECOND QUARTER FISCAL
2011 FINANCIAL RESULTS
- Net revenue of $41.8 million
- Non-GAAP income from continuing
operations of $1.4 million, or $0.03 per share
- Loss from continuing operations of $3.5
million, or $(0.08) per share
- Free cash flow of $6.7 million
Symmetricom, Inc. (NASDAQ:SYMM), a worldwide leader in precision
time and frequency technologies, today reported financial results
for its second quarter of fiscal 2011, ended December 26, 2010.
Net revenue for the second quarter of fiscal 2011 was $41.8
million, down $15.1 million or 26.5%, compared to the $56.9 million
reported for the second quarter of fiscal 2010. Symmetricom
reported a loss from continuing operations of $3.5 million, or
$(0.08) per share, for the second quarter of fiscal 2011, compared
to income from continuing operations of $1.9 million, or $0.04 per
share, in the second quarter of fiscal 2010. The loss from
continuing operations for the second quarter of fiscal 2011
included $3.9 million of restructuring charges, as compared to $1.5
million of restructuring charges for the second quarter of fiscal
2010.
The decrease in revenue is due to product supply and fulfillment
delays associated with the company’s transition to an outsourced
manufacturing and logistics model. Symmetricom ceased manufacturing
operations in Puerto Rico in December 2010 and expects to complete
the transition to an outsourced manufacturing and logistics model
in the third quarter, as previously disclosed.
The company’s order volume was at expected levels for the
quarter. Total sales backlog was $64.2 million as of December 26,
2010, compared to $54.4 million as of September 26, 2010.
Non-GAAP income from continuing operations for the second
quarter of fiscal 2011 was $1.4 million, or $0.03 per share,
compared to $4.3 million, or $0.10 per share, reported in the same
period of the prior year.
Cash, cash equivalents and short-term investments totaled $78.5
million as of December 26, 2010, an increase of $5.7 million from
the $72.8 million reported as of September 26, 2010. Net cash
provided by operating activities in the second quarter was $8.0
million and property, plant and equipment purchases were
approximately $1.3 million, resulting in free cash flow of $6.7
million.
"The financial results of our second quarter were disappointing
due to fulfillment delays that resulted from issues we encountered
during our manufacturing transition," said Dave Côté, President and
Chief Executive Officer of Symmetricom. "These difficulties are not
related to the inherent manufacturability or quality of our
products, but are logistical and process issues related to
component supply and material flows, which we are working hard to
solve as rapidly as possible."
"Despite these challenges, I am encouraged by the ongoing level
of demand for our products and feel good about the progress we are
making on new product and new market initiatives. Once these
manufacturing transition issues are behind us, I am confident that
our overall performance will once again reflect the company's
strong market position and many new market and growth
opportunities," said Côté.
Business Results
Revenue in the Communications Business in the second quarter of
fiscal 2011 was $20.4 million, compared to $35.8 million reported
in the same period of the prior fiscal year. Revenue in the
Government Business in the second quarter of fiscal 2011 was $21.5
million, compared to $21.1 million reported in the same period of
the prior fiscal year.
Third Quarter 2011
Guidance
Symmetricom’s guidance for the third quarter of fiscal 2011 is
as follows:
- Net revenue is expected to be in the
range of $45 million to $55 million
- GAAP earnings (loss) per share from
continuing operations is expected to be in the range of $(0.09) to
$0.01
- Non-GAAP earnings per share from
continuing operations is expected to be in the range of $0.00 to
$0.08
A reconciliation of GAAP and non-GAAP guidance is provided at
the end of this press release.
Investor Conference Call
As previously announced, management will hold a conference call
to discuss these results today, at 1:30 p.m. Pacific Time.
Investors are invited to join the conference call by dialing
+1-312-470-7356 and referencing “Symmetricom.” A live webcast will
also be available on the investor relations section of the
company’s website at www.symmetricom.com. An audio replay will be
available for one week and can be accessed by dialing
+1-203-369-1321 and referencing the passcode LEADER.
About Symmetricom, Inc.
Symmetricom, a world leader in precise time solutions, sets the
world's standard for time. The company generates, distributes and
applies precise time for the communications, aerospace/defense, IT
infrastructure and metrology industries. Symmetricom's customers,
from communications service providers and network equipment
manufacturers to governments and their suppliers worldwide, are
able to build more reliable networks and systems by using the
company's advanced timing technologies, atomic clocks, services and
solutions. All products support today's precise timing standards,
including GPS-based timing, IEEE 1588 (PTP), Network Time Protocol
(NTP), Synchronous Ethernet and DOCSIS(R) timing. Symmetricom is
based in San Jose, California, with offices worldwide. For more
information, visit: http://www.symmetricom.com.
Non-GAAP Information
Certain non-GAAP financial information is included in this press
release. In the reconciliation of GAAP to non-GAAP results,
Symmetricom excludes certain items related to non-cash equity-based
compensation, amortization of intangible assets, restructuring
charges, manufacturing transition costs and non-cash interest
expense charges that the company does not consider indicative of
its ongoing performance. The income tax effect after these non-GAAP
adjustments was determined based upon Symmetricom’s estimate of its
annual non-GAAP effective tax rate excluding these non-GAAP
adjustments. Symmetricom believes that excluding such items
provides investors, analysts and management with a representation
of the Company’s core operating performance and with information
useful in assessing, in conjunction with GAAP results, underlying
trends in operating performance. Management uses such non-GAAP
information to evaluate financial results and to establish
operational goals. Non-GAAP information should not be considered
superior to or as a substitute for data prepared in accordance with
GAAP. A reconciliation of the non-GAAP results to the GAAP results
is provided in the financial schedules portion of this press
release.
Free cash flow is defined as net cash provided by operating
activities minus purchases of property, plant and equipment.
Symmetricom believes this metric provides useful information to its
investors, analysts, and management about the level of cash
generated by normal business operations, including the use of cash
for the purchase of property, plant and equipment. Management also
views it as a measure of cash available to pay debt and return cash
to stockholders. Free cash flow is not a GAAP financial measure and
should not be considered superior to or a substitute for operating
cash flow or other cash flow data prepared in accordance with
GAAP.
Safe Harbor
This press release contains forward-looking information within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and is subject to the safe harbor created by those
sections. These forward-looking statements include statements
concerning third quarter fiscal 2011 guidance and future
performance, as well as the information regarding the usefulness of
the non-GAAP financial information. The statements in this press
release are made as of the date of this press release, even if
subsequently made available by Symmetricom on its website or
otherwise. Symmetricom's actual results could differ materially
from those projected or suggested in these forward-looking
statements. Factors that could cause future actual results to
differ materially from the results projected in or suggested by
such forward-looking statements include: reduced rates of demand
for telecommunication products, cable products or test and
measurement products, reduced rates or changes in government
spending patterns, customers' ability and need to upgrade existing
equipment, the company’s ability to fulfill delayed shipments,
delays in its transition to an outsourced manufacturing and
logistics model, the company’s ability to maintain or reduce
manufacturing and operating costs, timing of orders, cancellation
or delay of customer orders, loss of customers, customer acceptance
of new products, recessionary pressures, geopolitical risks such as
terrorist acts and the risk factors listed from time to time in
Symmetricom's reports filed with the Securities and Exchange
Commission, including the annual report on Form 10-K for the fiscal
year ended June 27, 2010 and subsequent Form 10-Q’s and 8-K's.
SYMM-F
SYMMETRICOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share amounts) (unaudited) Three months ended Six
months ended December 26, September 26, December 27, December 26,
December 27, 2010 2010 2009
2010 2009 Net revenue $
41,844 $ 54,379 $ 56,862 $ 96,223 $ 109,130 Cost of sales: Cost of
products and services 23,222 26,606 30,884 49,828 60,421
Amortization of intangible assets 267 287 368 554 736 Restructuring
charges 3,910 3,747 931
7,657 1,793 Total cost of sales
27,399 30,640 32,183
58,039 62,950 Gross profit 14,445 23,739
24,679 38,184 46,180 Gross margin 34.5 % 43.7 % 43.4 % 39.7 % 42.3
% Operating expenses: Research and development 6,738 6,606 6,113
13,344 11,827 Selling, general and administrative 13,596 12,799
14,259 26,395 27,798 Amortization of intangible assets 61 62 62 123
157 Restructuring charges 38 (881 ) 535
(843 ) 1,011 Total operating expenses
20,433 18,586 20,969
39,019 40,793 Operating income (loss)
(5,988 ) 5,153 3,710 (835 ) 5,387
Interest income, net of amortization
(accretion) ofpremium (discount) on investments
331 (108 ) 505 223 966 Interest expense - (55
) (1,270 ) (55 ) (2,544 ) Income (loss) from
continuing operations before taxes (5,657 ) 4,990 2,945 (667 )
3,809 Income tax provision (benefit) (2,181 ) 1,896
1,055 (285 ) 1,370 Income
(loss) from continuing operations (3,476 ) 3,094 1,890 (382 ) 2,439
Income (loss) from discontinued operations, net of tax (49 )
127 (391 ) 78 (766 ) Net
income (loss) $ (3,525 ) $ 3,221 $ 1,499 $ (304 ) $
1,673 Earnings (loss) per share - basic: Income
(loss) from continuing operations $ (0.08 ) $ 0.07 $ 0.04 $ (0.01 )
$ 0.06 Income (loss) from discontinued operations -
- (0.01 ) - (0.02 ) Net
income (loss) $ (0.08 ) $ 0.07 $ 0.03 $ (0.01 ) $
0.04 Weighted average shares outstanding - basic
43,272 43,430 43,313
43,351 43,245 Earnings (loss)
per share - diluted: Income (loss) from continuing operations $
(0.08 ) $ 0.07 $ 0.04 $ (0.01 ) $ 0.06 Income (loss) from
discontinued operations - -
(0.01 ) - (0.02 ) Net income (loss) $ (0.08 )
$ 0.07 $ 0.03 $ (0.01 ) $ 0.04 Weighted
average shares outstanding - diluted 43,272
43,772 43,708 43,351
43,771
SYMMETRICOM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands) (unaudited) December 26, June 27, 2010
2010 ASSETS Current assets: Cash and
cash equivalents $ 25,722 $ 21,794 Short-term investments 52,739
53,825 Accounts receivable, net 25,527 40,075 Inventories 41,665
37,229 Prepaids and other current assets 14,650
15,108 Total current assets 160,303 168,031 Property,
plant and equipment, net 22,570 23,077 Intangible assets, net 3,068
3,745 Deferred taxes and other assets 38,077
36,534 Total assets $ 224,018 $ 231,387
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $ 7,136 $ 6,768 Accrued compensation 13,849 18,731 Accrued
warranty 2,002 2,900 Other accrued liabilities 12,277
10,506 Total current liabilities 35,264 38,905
Long-term obligations 6,560 8,296 Deferred income taxes 334
334 Total liabilities 42,158 47,535
Stockholders' equity: Common stock 200,622 202,450 Accumulated
other comprehensive loss (216 ) (356 ) Accumulated deficit
(18,546 ) (18,242 ) Total stockholders' equity
181,860 183,852 Total liabilities and
stockholders' equity $ 224,018 $ 231,387
SYMMETRICOM, INC. RECONCILIATION OF
GAAP TO NON-GAAP RESULTS (In thousands, except per share amounts)
(unaudited) Three months ended Six months ended December 26,
September 26, December 27, December 26, December 27, 2010
2010 2009 2010
2009 Reconciliation from GAAP to Non-GAAP GAAP Income
(loss) from continuing operations $ (3,476 ) $ 3,094 $ 1,890 $ (382
) $ 2,439 Non-GAAP adjustments: Equity-based compensation
expense: Cost of products and services 230 23 262 253 472 Research
and development 184 138 228 322 428 Selling, general and
administrative 704 291 700
995 894 Total equity-based
compensation expense 1,118 452 1,190 1,570 1,794
Amortization of intangible assets: Cost of products and services
267 287 368 554 736 Operating expenses 61 62
62 123 157 Total
amortization of intangible assets 328 349 430 677 893
Restructuring charges 3,948 2,866 1,466 6,814 2,804 Manufacturing
transition costs 2,041 2,041
Non-cash interest expense on convertible
notes
-
-
765
-
1,533
Income tax effect of Non-GAAP adjustments (2,551 )
(1,177 ) (1,413 ) (3,728 ) (2,530 ) Non-GAAP
income from continuing operations $ 1,408 $ 5,584 $
3,563 $ 6,992 $ 5,400 Earnings (loss)
per share - diluted: GAAP income (loss) from continuing operations
$ (0.08 ) $ 0.07 $ 0.04 $ (0.01 ) $ 0.06 Non-GAAP income from
continuing operations $ 0.03 $ 0.13 $ 0.08 $ 0.16 $ 0.12
Weighted average shares outstanding - diluted 43,972 43,772 43,708
43,862 43,771
SYMMETRICOM, INC. RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In
thousands, except per share amounts) (unaudited)
Three months ended Six months ended December 26, September 26,
December 27, December 26, December 27, 2010 2010
2009 2010 2009 GAAP Revenue $ 41,844 $
54,379 $ 56,862 $ 96,223 $ 109,130
Reconciliation from GAAP to Non-GAAP
GrossProfit from continuing operations:
GAAP Gross profit (A) $ 14,445 $ 23,739 $ 24,679 $ 38,184 $ 46,180
GAAP Gross margin 34.5% 43.7% 43.4% 39.7% 42.3% Non-GAAP
adjustments: Equity-based compensation expense 230 23 262 253 472
Amortization of intangible assets 267 287 368 554 736 Restructuring
charges 3,910 3,747 931 7,657 1,793 Manufacturing transition costs
2,041 - - 2,041 -
Non-GAAP Gross profit (B) $ 20,893 $ 27,796 $ 26,240 $ 48,689 $
49,181 Non-GAAP Gross margin 49.9% 51.1% 46.1% 50.6% 45.1%
Reconciliation from GAAP to Non-GAAP
OperatingExpense from continuing operations:
GAAP Operating expenses (C) $ 20,433 $ 18,586 $ 20,969 $ 39,019 $
40,793 Operating expense % to revenue 48.8% 34.2% 36.9% 40.6% 37.4%
Non-GAAP adjustments: Equity-based compensation expense
(888) (429) (928) (1,317) (1,322) Amortization of intangible assets
(61) (62) (62) (123) (157) Restructuring charges (38)
881 (535) 843 (1,011) Non-GAAP
operating expenses (D) $ 19,446 $ 18,976 $ 19,444 $ 38,422 $ 38,303
Non-GAAP operating expenses % to revenue 46.5% 34.9% 34.2% 39.9%
35.1%
Reconciliation from GAAP to Non-GAAP
OperatingIncome (loss) from continuing operations:
GAAP Operating income (loss) (A) - (C) $ (5,988) $ 5,153 $ 3,710 $
(835) $ 5,387 Operating income (loss) % to revenue -14.3% 9.5% 6.5%
-0.9% 4.9% Non-GAAP Operating income (loss) (B) - (D) $
1,447 $ 8,820 $ 6,796 $ 10,267 $ 10,878 Operating income % to
revenue 3.5% 16.2% 12.0% 10.7% 10.0%
SYMMETRICOM, INC. RECONCILIATION OF FORWARD-LOOKING GUIDANCE
FOR NON-GAAP FINANCIAL MEASURES TO PROJECTED GAAP GUIDANCE FOR
REVENUE AND EPS (In thousands, except per share amounts)
(Unaudited)
Three Months Ending March 27,
2011 Revenue Earnings (Loss) Per Share from
Continuing Operations
From To From To
GAAP Guidance $ 45,000 $ 55,000 $
(0.09 ) $ 0.01
Estimated Non-GAAP Adjustments
Equity-based compensation expense 0.03 0.03 Amortization of
intangible assets 0.01 0.01 Restructuring charges 0.07 0.05
Manufacturing transition costs 0.02 0.01 Income tax effect of
non-GAAP adjustments (0.04 )
(0.03 ) Total Non-GAAP Adjustments 0.09 0.07
Non-GAAP Guidance $ 45,000 $ 55,000 $ -
$ 0.08
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