SAN JOSE, Calif., Jan. 23, 2013 /PRNewswire/ -- Symmetricom, Inc.
(NASDAQ: SYMM), a worldwide leader in precision time and frequency
technologies, today reported financial results for its second
quarter of fiscal year 2013 ended December
30, 2012.
(Logo:
http://photos.prnewswire.com/prnh/20110829/AQ59077LOGO)
Net revenue for the second quarter of fiscal 2013 was
$49.2 million, down $9.1 million, or 15.6%, compared to the
$58.3 million reported for the second
quarter of fiscal 2012. Symmetricom reported a net loss of
$1.8 million, or $0.04 per share, for the second quarter of fiscal
2013, compared to net income of $2.4
million, or $0.06 per share,
in the second quarter of fiscal 2012. The loss for the second
quarter of fiscal 2013 included $1.2
million of restructuring charges, principally related to the
Company's previously announced R&D consolidation
activities.
The decrease in net revenue was due primarily to lower U.S.
government spending and lower communications service provider
spending on wireline-related equipment. Partially offsetting
this weakness in the quarter was continued strength in shipments of
the Company's Quantum™ SA.45s Chip Scale Atomic Clock
(CSAC), a key strategic initiative for the Company.
Non-GAAP net income for the second quarter of fiscal 2013 was
$0.3 million, or $0.01 per share, compared to $4.2 million, or $0.10 per share, reported for the second quarter
of fiscal 2012.
Cash, cash equivalents and short-term investments totaled
$70.8 million as of December 30, 2012, a decrease of $0.8 million from the $71.6 million reported as of September 30, 2012. Net cash provided by
operating activities in the second quarter was $2.3 million, and property, plant and equipment
purchases were approximately $1.2
million, resulting in free cash flow of $1.1 million.
The Company also announced a restructuring action today to
reduce operating costs while retaining focus on its strategic
initiatives. Symmetricom plans to reduce the size of its
workforce by approximately 20 positions. The reductions will
begin in January and are expected to be complete by August
2013. In conjunction with the headcount reduction, the
Company will further reduce the size of its facility presence in
Santa Rosa, CA. Symmetricom
expects to incur restructuring charges in the range of $1.5 million to $1.8 million in connection with
the plan. Upon completion, Symmetricom expects these
restructuring actions to reduce annual costs by approximately
$4.0 million.
"The financial results of our second quarter were lower than we
originally anticipated due to further softening of purchases by
both U.S. government customers and wireline operators," said
Dave Cote, president and chief
executive officer of Symmetricom. "As we manage through the
near term environment, we are taking actions to tighten our
operating cost model and enhance profitability. At the same
time, we remain focused on building our product and customer
portfolios, and we will continue to invest in our key initiatives,
including Quantum™ CSAC, PackeTime® and Government
Programs. I am enthusiastic about the progress we are making
on these initiatives and their potential to fuel Symmetricom's
long-term growth."
Business Segment Revenue Results
Revenue in the
Communications Business in the second quarter of fiscal 2013 was
$26.2 million, compared to
$33.3 million reported in the second
quarter of fiscal 2012. Revenue in the Government and
Enterprise Business in the second quarter of fiscal 2013 was
$23.0 million, compared to
$25.0 million reported in the second
quarter of fiscal 2012.
Third Quarter 2013 Guidance
Symmetricom's guidance for
the third quarter of fiscal 2013 is as follows:
- Net revenue is expected to be in the range of $48 million to $54 million
- GAAP earnings (loss) per share is expected to be in the range
of $(0.07) to $0.01
- Non-GAAP earnings per share is expected to be in the range of
$0.00 to $0.05
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 +1-212-547-0198 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 +1-203-369-1432.
About Symmetricom, Inc.
Symmetricom (NASDAQ:SYMM), 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®
timing. Symmetricom is based in San
Jose, California, with offices worldwide. For more
information, visit: http://www.symmetricom.com or join the dialogue
at http://www.twitter.com/symmetricom.
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,
acquisition-related costs, amortization of intangible assets,
restructuring charges, and off-shore development transition costs
that the Company does not consider indicative of its ongoing
performance. The income tax effect after these non-GAAP
adjustments is 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 or used in
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 or used in 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 2013
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 expressly disclaims any obligation to update or revise
any forward-looking statement contained herein, whether as a result
of a change in its expectations, a change in any events, conditions
or circumstances on which a forward-looking statement is based, 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, but are
not limited to, the extent and magnitude of customer orders
received and shipped within the same quarter, risks relating to
general economic conditions in the markets we address and the
telecommunications and government markets in general, risks related
to the development of our new products and services, reliance on
our contract manufacturer, the effects of increasing competition
and competitive pricing pressure, uncertainties associated with
changing intellectual property laws or misappropriation of
intellectual property, developments in and expenses related to
litigation, the inability to obtain sufficient amounts of key
components, the rescheduling or cancellation of key customer
orders, the loss of a key customer, the effects of new and emerging
technologies, the risk that excess inventory may result in
write-offs, price erosion and decreased demand, fluctuations in the
rate of exchange of foreign currency, changes in our effective tax
rate, market acceptance of our new products and services,
technological advancements, undetected errors, design flaws,
defects in our products or start-up manufacturing difficulties, the
risks associated with our international sales, potential short-term
investment losses and other risks due to credit market dislocation,
geopolitical risks and risk of terrorist activities, the risks
associated with attempting to integrate other companies and
businesses we acquire, 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 July 1, 2012
and subsequent Forms 10-Q and 8-K.
SYMM-F
Contact:
Justin Spencer
Chief Financial Officer
+1-408-428-7801
jspencer@symmetricom.com
SYMMETRICOM, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In
thousands, except per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Six months
ended
|
|
|
|
December
30,
|
|
September
30,
|
|
January
1,
|
|
December
30,
|
|
January
1,
|
|
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
|
$
49,151
|
|
$
56,391
|
|
$
58,294
|
|
$
105,542
|
|
$114,672
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products and
services
|
|
|
27,861
|
|
31,900
|
|
32,225
|
|
59,761
|
|
62,055
|
Acquisition-related
costs
|
|
|
248
|
|
234
|
|
185
|
|
482
|
|
371
|
Restructuring
charges
|
|
|
41
|
|
(45)
|
|
674
|
|
(4)
|
|
1,091
|
Total cost of sales
|
|
|
28,150
|
|
32,089
|
-
|
33,084
|
|
60,239
|
|
63,517
|
Gross profit
|
|
|
21,001
|
|
24,302
|
|
25,210
|
|
45,303
|
|
51,155
|
Gross margin
|
|
|
42.7%
|
|
43.1%
|
|
43.2%
|
|
42.9%
|
|
44.6%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
7,805
|
|
8,313
|
|
6,548
|
|
16,118
|
|
13,446
|
Selling, general and
administrative
|
|
|
14,778
|
|
16,227
|
|
14,864
|
|
31,005
|
|
29,674
|
Amortization of intangible
assets
|
|
|
86
|
|
86
|
|
52
|
|
172
|
|
104
|
Restructuring
charges
|
|
|
1,146
|
|
55
|
|
103
|
|
1,201
|
|
199
|
Total operating expenses
|
|
|
23,815
|
|
24,681
|
|
21,567
|
|
48,496
|
|
43,423
|
Operating income (loss)
|
|
|
(2,814)
|
|
(379)
|
|
3,643
|
|
(3,193)
|
|
7,732
|
Interest
income, net of amortization (accretion) of premium (discount) on
investments
|
|
|
178
|
|
(36)
|
|
(296)
|
|
142
|
|
(230)
|
Income (loss) before
taxes
|
|
|
(2,636)
|
|
(415)
|
|
3,347
|
|
(3,051)
|
|
7,502
|
Income tax
provision (benefit)
|
|
|
(861)
|
|
(212)
|
|
902
|
|
(1,073)
|
|
2,308
|
Net income (loss)
|
|
|
$
(1,775)
|
|
$
(203)
|
|
$
2,445
|
|
$
(1,978)
|
|
$
5,194
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
(0.04)
|
|
$
(0.01)
|
|
$
0.06
|
|
$
(0.05)
|
|
$
0.12
|
Diluted
|
|
|
$
(0.04)
|
|
$
(0.01)
|
|
$
0.06
|
|
$
(0.05)
|
|
$
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
used in computing earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding -
basic
|
|
|
40,356
|
|
40,510
|
|
42,292
|
|
40,432
|
|
42,490
|
Weighted average shares outstanding -
diluted
|
|
|
40,356
|
|
40,510
|
|
42,762
|
|
40,432
|
|
42,989
|
SYMMETRICOM, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
30,
|
|
July
1,
|
|
|
|
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
$
25,966
|
|
$
27,659
|
|
Short-term
investments
|
|
|
|
44,789
|
|
39,280
|
|
Accounts
receivable, net
|
|
|
35,789
|
|
45,952
|
|
Inventories
|
|
|
|
48,176
|
|
47,618
|
|
Prepaids
and other current assets
|
|
|
19,290
|
|
16,943
|
|
Total current
assets
|
|
|
|
174,010
|
|
177,452
|
Property,
plant and equipment, net
|
|
|
23,075
|
|
22,702
|
Intangible
assets, net
|
|
|
|
3,364
|
|
3,458
|
Deferred
taxes and other assets
|
|
|
28,200
|
|
27,413
|
|
Total assets
|
|
|
|
$
228,649
|
|
$231,025
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
$
12,715
|
|
$
9,300
|
|
Accrued
compensation
|
|
|
|
12,606
|
|
14,574
|
|
Accrued
warranty
|
|
|
|
1,492
|
|
1,722
|
|
Other
accrued liabilities
|
|
|
|
10,409
|
|
11,841
|
|
Total current
liabilities
|
|
|
37,222
|
|
37,437
|
Long-term
obligations
|
|
|
|
5,239
|
|
5,472
|
Deferred
income taxes
|
|
|
|
334
|
|
334
|
|
Total liabilities
|
|
|
|
42,795
|
|
43,243
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
|
193,408
|
|
193,478
|
|
Accumulated other comprehensive loss
|
|
|
(112)
|
|
(232)
|
|
Accumulated deficit
|
|
|
|
(7,442)
|
|
(5,464)
|
|
Total stockholders'
equity
|
|
|
185,854
|
|
187,782
|
|
Total liabilities and stockholders' equity
|
|
$
228,649
|
|
$231,025
|
SYMMETRICOM, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
|
(In
thousands, except per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Six months
ended
|
|
December
30,
|
|
September
30,
|
|
January
1,
|
|
December
30,
|
|
January
1,
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
Reconciliation from GAAP to Non-GAAP
|
|
|
|
|
|
|
|
|
|
GAAP Net
income (loss)
|
$
(1,775)
|
|
$
(203)
|
|
$
2,445
|
|
$
(1,978)
|
|
$
5,194
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Equity-based compensation expense:
|
|
|
|
|
|
|
|
|
|
Cost of products and
services
|
250
|
|
291
|
|
215
|
|
541
|
|
334
|
Research and
development
|
316
|
|
361
|
|
295
|
|
677
|
|
584
|
Selling, general and
administrative
|
1,121
|
|
1,120
|
|
1,170
|
|
2,241
|
|
1,925
|
Total
equity-based compensation expense
|
1,687
|
|
1,772
|
|
1,680
|
|
3,459
|
|
2,843
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs and amortization of
intangible assets:
|
|
|
|
|
|
|
|
|
|
Cost of products and
services
|
248
|
|
234
|
|
185
|
|
482
|
|
371
|
Operating
expenses
|
86
|
|
86
|
|
52
|
|
172
|
|
104
|
Total
acquisition-related costs and amortization of intangible
assets
|
334
|
|
320
|
|
237
|
|
654
|
|
475
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
1,187
|
|
10
|
|
777
|
|
1,197
|
|
1,290
|
Off-shore
development transition costs
|
-
|
|
729
|
|
-
|
|
729
|
|
-
|
Income tax
effect of Non-GAAP adjustments
|
(1,154)
|
|
(1,070)
|
|
(934)
|
|
(2,224)
|
|
(1,470)
|
Non-GAAP
Net income
|
$
279
|
|
$
1,558
|
|
$
4,205
|
|
$
1,837
|
|
$
8,332
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share - diluted:
|
|
|
|
|
|
|
|
|
|
GAAP Net income
(loss)
|
$
(0.04)
|
|
$
(0.01)
|
|
$
0.06
|
|
$
(0.05)
|
|
$
0.12
|
Non-GAAP Net
income
|
$
0.01
|
|
$
0.04
|
|
$
0.10
|
|
$
0.04
|
|
$
0.19
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding - diluted
|
41,464
|
|
41,675
|
|
42,762
|
|
41,514
|
|
42,989
|
SYMMETRICOM, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
|
(In
thousands, except per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Six months
ended
|
|
|
|
December
30,
|
|
September
30,
|
|
January
1,
|
|
December
30,
|
|
January
1,
|
|
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Revenue
|
|
$
49,151
|
|
$
56,391
|
|
$
58,294
|
|
$
105,542
|
|
$114,672
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from GAAP to Non-GAAP Gross
Profit:
|
|
|
|
|
|
|
|
|
|
|
GAAP Gross
profit
|
(A)
|
$
21,001
|
|
$
24,302
|
|
$
25,210
|
|
$
45,303
|
|
$
51,155
|
|
GAAP Gross
margin
|
|
42.7%
|
|
43.1%
|
|
43.2%
|
|
42.9%
|
|
44.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based compensation expense
|
|
250
|
|
291
|
|
215
|
|
541
|
|
334
|
|
Acquisition-related costs
|
|
248
|
|
234
|
|
185
|
|
482
|
|
371
|
|
Restructuring charges
|
|
41
|
|
(45)
|
|
674
|
|
(4)
|
|
1,091
|
Non-GAAP
Gross profit
|
(B)
|
$
21,540
|
|
$
24,782
|
|
$
26,284
|
|
$
46,322
|
|
$
52,951
|
|
Non-GAAP
Gross margin
|
|
43.8%
|
|
43.9%
|
|
45.1%
|
|
43.9%
|
|
46.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from GAAP to Non-GAAP Operating
Expense:
|
|
|
|
|
|
|
|
|
|
|
GAAP
Operating expenses
|
(C)
|
$
23,815
|
|
$
24,681
|
|
$
21,567
|
|
$
48,496
|
|
$
43,423
|
|
Operating
expense % to revenue
|
|
48.5%
|
|
43.8%
|
|
37.0%
|
|
45.9%
|
|
37.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based compensation expense
|
|
(1,437)
|
|
(1,481)
|
|
(1,465)
|
|
(2,918)
|
|
(2,509)
|
|
Amortization of intangible assets
|
|
(86)
|
|
(86)
|
|
(52)
|
|
(172)
|
|
(104)
|
|
Restructuring charges
|
|
(1,146)
|
|
(55)
|
|
(103)
|
|
(1,201)
|
|
(199)
|
|
Off-shore
development transition costs
|
|
-
|
|
(729)
|
|
-
|
|
(729)
|
|
-
|
Non-GAAP
operating expenses
|
(D)
|
$
21,146
|
|
$
22,330
|
|
$
19,947
|
|
$
43,476
|
|
$
40,611
|
|
Non-GAAP
operating expenses % to revenue
|
|
43.0%
|
|
39.6%
|
|
34.2%
|
|
41.2%
|
|
35.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from GAAP to Non-GAAP Operating Income
(loss):
|
|
|
|
|
|
|
|
|
|
GAAP
Operating income (loss)
|
(A) -
(C)
|
$
(2,814)
|
|
$
(379)
|
|
$
3,643
|
|
$
(3,193)
|
|
$
7,732
|
|
Operating
income % to revenue
|
|
-5.7%
|
|
-0.7%
|
|
6.2%
|
|
-3.0%
|
|
6.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Operating income
|
(B) -
(D)
|
$
394
|
|
$
2,452
|
|
$
6,337
|
|
$
2,846
|
|
$
12,340
|
|
Operating
income % to revenue
|
|
0.8%
|
|
4.3%
|
|
10.9%
|
|
2.7%
|
|
10.8%
|
SYMMETRICOM, INC.
|
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR GAAP
REVENUE AND EPS
|
TO
NON-GAAP GUIDANCE FOR REVENUE AND EPS
|
(In
thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ending March 31, 2013
|
|
|
Revenue
|
|
Earnings
Per Share
|
|
|
From
|
To
|
|
From
|
To
|
|
|
|
|
|
|
|
GAAP
Guidance
|
$
48,000
|
$
54,000
|
|
$
(0.07)
|
$
0.01
|
|
|
|
|
|
|
|
Estimated Non-GAAP Adjustments
|
|
|
|
|
|
|
Equity-based compensation expense
|
|
|
|
0.04
|
0.04
|
|
Amortization of intangible assets
|
|
|
|
0.01
|
0.01
|
|
Integration and restructuring charges
|
|
|
|
0.07
|
0.06
|
|
Income tax
effect of non-GAAP adjustments
|
|
|
|
(0.05)
|
(0.07)
|
|
Total
Non-GAAP Adjustments
|
|
|
|
0.07
|
0.04
|
|
|
|
|
|
|
|
Non-GAAP Guidance
|
$
48,000
|
$
54,000
|
|
$
0.00
|
$
0.05
|
SOURCE Symmetricom, Inc.