2014

Symmetricom® Reports First Quarter Fiscal Year 2013 Financial Results - Net revenue of $56.4 million in fiscal Q1'13

- Net loss of $0.2 million, or $0.01 per share

- Non-GAAP net income of $1.6 million, or $0.04 per share

- Free Cash Flow of $6.8 million

SAN JOSE, Calif., Oct. 24, 2012 /PRNewswire/ -- Symmetricom®, Inc. (NASDAQ: SYMM), a worldwide leader in precision time and frequency technologies, today reported financial results for its first quarter of fiscal year 2013 ended September 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20110829/AQ59077LOGO)

Net revenue for the first quarter of fiscal 2013 was $56.4 million, a level comparable to the net revenue reported in the same period of the prior year.  Shipments of the QuantumTM SA.45s Chip Scale Atomic Clock (CSAC) and PackeTime® products for wireless and Ethernet backhaul deployments continued to increase in the first quarter of fiscal 2013.  Symmetricom reported a net loss of $0.2 million, or $0.01 per share, for the first quarter of fiscal 2013, compared to net income of $2.7 million, or $0.06 per share, in the first quarter of fiscal 2012.  The first quarter of fiscal 2013 results were impacted by CSAC manufacturing ramp-up costs, off-shore development transition costs, along with operating expense investments we're making to fuel key growth initiatives.

Non-GAAP net income for the first quarter of fiscal 2013 was $1.6 million, or $0.04 per share, compared to $4.1 million, or $0.10 per share, reported for the first quarter of fiscal 2012.  Included in both our GAAP and non-GAAP net income was approximately $1.0 million, net of tax, or $0.02 per share, of manufacturing costs associated with the ramp-up of our CSAC production volumes.

Cash, cash equivalents and short-term investments totaled $71.6 million as of September 30, 2012, an increase of $4.7 million from the $66.9 million reported as of July 1, 2012, reflecting strong cash inflows from operations, offset by approximately $3.8 million in stock repurchases during the first quarter of fiscal 2013.  Net cash generated from operating activities in the first quarter was approximately $7.8 million, driven by a sequential decrease in inventories compared to the prior quarter.  After subtracting approximately $1.0 million of property, plant and equipment purchases, free cash flow was approximately $6.8 million.

"Although our first quarter results were below our expectations, we saw relative stability in our business, especially in light of the continued challenges of the macro-economic environment.  Revenue was driven by strength in our key growth initiatives, including our industry-leading PackeTime® and QuantumTM SA.45s Chip Scale Atomic Clock (CSAC) solutions as well as in our government programs. Our business for government instruments and clocks was challenged, given the uncertainty in government spending.  This was contrasted by near record bookings in our Government Programs business, which are aligned well with space, defense, and intelligence priorities in the U.S," said Dave Cote, president and chief executive officer of Symmetricom

Business Results
Revenue in the Communications Business in the first quarter of fiscal 2013 was $31.4 million, compared to $33.6 million reported in the first quarter of fiscal 2012.  Revenue in the Government and Enterprise Business in the first quarter of fiscal 2013 was $25.0 million, compared to $22.8 million reported in the first quarter of fiscal 2012.

Second Quarter 2013 Guidance
Symmetricom's guidance for the second quarter of fiscal 2013 is as follows:

  • Net revenue is expected to be in the range of $55 million to $62 million
  • GAAP earnings (loss) per share is expected to be in the range of $(0.03) to $0.04
  • Non-GAAP earnings per share is expected to be in the range of $0.04 to $0.10

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 +1-210-234-0044 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 +1-203-369-3246.

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, Calif., 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 second 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:
Dan Madden
VP Finance & Investor Relations
+1-408-428-7929
dmadden@symmetricom.com

 

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)










Three months ended



September 30,


July 1,


October 2,



2012


2012


2011








Net revenue 


$        56,391


$62,606


$  56,378

Cost of sales:







     Cost of products and services


31,900


34,214


29,830

     Acquisition-related costs


234


174


186

     Restructuring charges


(45)


22


417

         Total cost of sales


32,089


34,410


30,433

         Gross profit


24,302


28,196


25,945

         Gross margin


43.1%


45.0%


46.0%

Operating expenses:







     Research and development


8,313


7,385


6,898

     Selling, general and administrative


16,227


14,966


14,810

     Amortization of intangible assets


86


86


52

     Restructuring charges


55


(78)


96

          Total operating expenses


24,681


22,359


21,856

          Operating income (loss)


(379)


5,837


4,089

Interest income, net of amortization (accretion) of premium (discount) on investments


(36)


287


66

     Income (loss) before taxes


(415)


6,124


4,155

Income tax provision (benefit)


(212)


2,167


1,406

     Net income (loss) 


$            (203)


$  3,957


$    2,749








Earnings (loss) per share:







     Basic


$           (0.01)


$    0.10


$     0.06

     Diluted


$           (0.01)


$    0.09


$     0.06








Shares used in computing earnings (loss) per share:







   Weighted average shares outstanding - basic


40,510


41,152


42,687

   Weighted average shares outstanding - diluted


40,510


41,927


43,294

 

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)








September 30,


July 1,



2012


2012






ASSETS




Current assets:





Cash and cash equivalents

$        27,814


$  27,659


Short-term investments

43,811


39,280


Accounts receivable, net

41,392


45,952


Inventories

45,899


47,618


Prepaids and other current assets

17,919


16,943


     Total current assets

176,835


177,452

Property, plant and equipment, net

22,284


22,702

Intangible assets, net

3,196


3,458

Deferred taxes and other assets

27,773


27,413


          Total assets

$      230,088


$231,025






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:





Accounts payable

$        13,941


$    9,300


Accrued compensation

10,692


14,574


Accrued warranty

1,779


1,722


Other accrued liabilities

10,671


11,841


     Total current liabilities

37,083


37,437

Long-term obligations

5,241


5,472

Deferred income taxes

334


334


     Total liabilities

42,658


43,243

Stockholders' equity:





Common stock

193,210


193,478


Accumulated other comprehensive loss

(113)


(232)


Accumulated deficit

(5,667)


(5,464)


     Total stockholders' equity

187,430


187,782


          Total liabilities and stockholders' equity

$      230,088


$231,025

 

SYMMETRICOM, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(unaudited)








Three months ended


September 30,


July 1,


October 2,


2012


2012


2011

Reconciliation from GAAP to Non-GAAP 






GAAP Net income (loss) 

$            (203)


$3,957


$    2,749







Non-GAAP adjustments:






Equity-based compensation expense:






     Cost of products and services

291


261


119

     Research and development

361


287


289

     Selling, general and administrative

1,120


1,013


755

Total equity-based compensation expense

1,772


1,561


1,163







Acquisition-related costs and amortization of intangible assets:






     Cost of products and services

234


174


186

     Operating expenses

86


86


52

Total acquisition-related costs and amortization of intangible assets

320


260


238







Restructuring charges 

10


(56)


513

Off-shore development transition costs

729


-


-

Income tax effect of Non-GAAP adjustments

(1,070)


(511)


(536)

Non-GAAP Net income

$          1,558


$5,211


$    4,127







Earnings (loss) per share - diluted:






     GAAP Net income (loss)

$           (0.01)


$  0.09


$     0.06

     Non-GAAP Net income

$            0.04


$  0.12


$     0.10







Weighted average shares outstanding - diluted

41,675


41,927


43,294

 


SYMMETRICOM, INC.


RECONCILIATION OF GAAP TO NON-GAAP RESULTS


(In thousands, except per share amounts)


(unaudited)




















Three months ended




September 30,


July 1,


October 2,




2012


2012


2011









GAAP Net revenue


$        56,391


$62,606


$  56,378









Reconciliation from GAAP to Non-GAAP Gross Profit:







GAAP Gross profit

(A)

$        24,302


$28,196


$  25,945


GAAP Gross margin


43.1%


45.0%


46.0%









Non-GAAP adjustments:








Equity-based compensation expense


291


261


119


Acquisition-related costs


234


174


186


Restructuring charges


(45)


22


417









Non-GAAP Gross profit

(B)

$        24,782


$28,653


$  26,667


Non-GAAP Gross margin


43.9%


45.8%


47.3%









Reconciliation from GAAP to Non-GAAP Operating Expense:







GAAP Operating expenses

(C)

$        24,681


$22,359


$  21,856


Operating expense % to revenue


43.8%


35.7%


38.8%









Non-GAAP adjustments:








Equity-based compensation expense


(1,481)


(1,300)


(1,044)


Amortization of intangible assets


(86)


(86)


(52)


Restructuring charges


(55)


78


(96)


Off-shore development transition costs


(729)


-


-









Non-GAAP operating expenses

(D)

$        22,330


$21,051


$  20,664


Non-GAAP operating expenses % to revenue


39.6%


33.6%


36.7%









Reconciliation from GAAP to Non-GAAP Operating Income:







GAAP Operating income (loss)

(A) - (C)

$            (379)


$  5,837


$    4,089


Operating income % to revenue


-0.7%


9.3%


7.3%









Non-GAAP Operating income

(B) - (D)

$          2,452


$  7,602


$    6,003


Operating income % to revenue


4.3%


12.1%


10.6%

 

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 December 30, 2012



Revenue


Earnings Per Share from
Continuing Operations



From

To


From

To








GAAP Guidance

$55,000

$62,000


$(0.03)

$0.04








Estimated Non-GAAP Adjustments







Equity-based compensation expense




0.05

0.04


Amortization of intangible assets




0.01

0.01


Integration and restructuring charges




0.05

0.04


Income tax effect of non-GAAP adjustments




(0.04)

(0.03)


Total Non-GAAP Adjustments

-

-


0.07

0.06








Non-GAAP Guidance

$55,000

$62,000


$ 0.04

$0.10

 

SOURCE Symmetricom, Inc.



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